We want to begin this post by wishing our readers a Happy New Year, and a happy and prosperous 2018. Part of achieving that goal involves the proper preparation of business tax returns. While the April 15 federal income tax filing deadline is months away, tax season can be very busy for tax attorneys, accountants and business owners alike. So it is important to plan diligently. In doing so, it is important to maximize the deductions afforded by the U.S. Tax Code. With this post, we will highlight the importance of properly writing off furniture and technology used in a business.
Essentially, Section 179 of the tax code allows for deductions on equipment purchases, and there is wide latitude on the definition of the term “equipment.” For example, it can include furniture, especially tables and chairs, desks, and file cabinets that are used in the business. Technology includes computers, tablets, cell phones, printers, monitors and portable storage devices, to name a few. The purchase of these items can be deducted from your actual gross income as you work down towards your taxable income.
The benefit small business owners may enjoy is that these items do not have to be depreciated year over year. Depending on how much is spent on them, and how much they are used within the business, a full deduction may be realized. For instance if these items are used strictly for business purposes, an immediate deduction may be taken. If they are used less for business purposes, a smaller deduction may be used.
If you have questions about equipment deductions, an experienced tax attorney can help.