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Category Archives: Tax Savings
January 27, 2011Posted by on
Saving cost is always an important part of a good business plan, but in this sluggish economy, it is even more important than ever before. To help you save money the IRS has extended the Section 179 tax incentive through 2011. To take full advantage of the tax savings, you should plan your equipment purchases and include it in the budget now, instead of waiting for the end of the year.
Planning your equipment purchases and including them in the budget now will allow you to take full advantage of the savings instead of waiting for the end of the year. Up to $500,000 can be used to purchase “property” which can be written off as an expense. The “property” can be anything used for business purposes such as machinery, computers, software, office furniture, vehicles, or other tangible goods.
Here are some technology investments you should consider that will provide efficiency and productivity, not only for this year’s tax savings but also for the long term savings, efficiency and productivity:
Core Network – The core IT network is the plumbing that supports both, voice and data communications. We utilize the network for much more than just sharing resources like printer and fileserver. We are running line of business applications like CRM which improve productivity; we are utilizing social media, multi media, and other web based applications to communicate with clients and generate demands for our products and services. To ensure that these and other line of business applications are providing the productivity gains and efficiencies, the core network needs to be able to support the performance and scalability requirements. A reliable and efficient network improves performance, security and stability of business applications allowing them to do more in less time.
Security – Security has become ever more important in our highly connected, social media driven network. Most of us are actively utilizing social media and online applications for a variety of purposes, from personal and business communications to marketing and financial transactions. Some businesses in industries like healthcare and retail have to meet regulatory compliance, such as HIPAA and PCI. Implementing technology which can secure your application, data and users can help your company stay secure and meet your particular regulatory compliance.
Firewall – A firewall is the most rudimentary security control every IT network must have. However, previous generation firewalls provide protection based on application-port combination, which means they identify applications via the port they access. However, the current browser based applications are delivered over default port 80 and others don’t consistently use the same port. The firewall needs to be able to identify applications such as Twitter, Facebook, IM and others to protect the network and users against the threats delivered through them. Upgrading your regular firewall to an application aware, unified threat management (UTM) firewall can significantly improve your network protection.
Servers and Workstations – Servers and Workstations are the workhorses; they run the applications and serve the user’s requests. Previous generation servers and workstations were power hungry and inefficient compared to the latest generation of computers. By replacing older servers and workstations with “Energy Star” certified servers and workstations you can realize significant savings in energy costs over a year. Some studies suggest as much 60% savings in energy costs over a period of a year.
Virtualization – Server virtualization has arrived and has been accepted as efficient solution providing cost savings, reliability and productivity. If you have more than a few servers, you can realize significant energy cost savings, higher reliability and availability by virtualizing them and consolidating the physical servers.
Telephone System, VoIP and Unified Communications – If you are using older telephone systems, you can significantly improve collaboration with your employees and communications with your clients by upgrading your system to the latest VoIP and unified communications (UC) system. VoIP and UM are not hype; VoIP and UC systems increase efficiency and productivity by integrating voice, email, fax, CRM and other line of business, point applications; VoIP and UC system can also reduce local and long distance costs and operational cost as a part of the converged network.
Applications – Applications need to be upgraded periodically, not only to ensure we continue to receive vendor support, but also to improve productivity and security. If you haven’t upgraded your line of business applications, such as Email, CRM, ERP and database servers in a while then you can realize higher productivity, efficient utilization and greater security by upgrading them to the latest version.
Backup, Restore and Business Continuity – How are you currently backing up your data? Are you still using tape backup? Have you tested the restorability of your data? Tape based backup is prone to errors and data restoration can be complicated if you have to restore from multiple tapes. If one of the tapes is damaged all of data becomes non-restorable. With increasing amount of data being stored on variety of mobile devices, having a proper backup, restore and business continuity solution is critical for any business. Upgrading your current backup to a disk based backup with offsite data storage can significantly simplify backup, restore and business continuity process and provide efficient protection in the event of a disaster.
As you can see there are many areas of technology you can invest in and take advantage of the tax savings offered by Section 179 which will help you improve core efficiency, provide higher productivity and reduce costs.
Please consult with your accountant to verify the specific equipment and software and the amount which qualify for Tax incentive.
December 23, 2010Posted by on
We are all in a festive mood as 2010 draws to a close. Christmas is only a couple days away and New Year only 8 days away. However, for many business owners (myself being one), the business is always on our mind. As business owners we are always looking for ways to make our business more efficient by improving productivity and reducing costs.
One way to reduce cost comes in the form of tax savings – Section 179 from the IRS. According to the recently updated Small Business Jobs and Credit Act of 2010, the Federal Government upgraded a tax deduction, allowing you to buy up to $500,000 in machinery, computers, software, office furniture, vehicles, or other tangible goods and significantly reduce your taxable income on current year’s tax return by treating qualifying equipment as an expense rather than a capital expenditure.
Computer equipment and off-the shelf software fall under this Section 179 category. If you have been waiting to upgrade your firewall, networking equipment, servers and computers then this is the right time to act as you can expense your purchase and realize a significant tax savings. You can use the Tax Savings Calculator to estimate how much you can save on your equipment purchase.
Additionally, many vendors like Cisco, Trend Micro, Wireheadtec and others are offering significant discounts if you purchase hardware and/or software before year end. The vendor discounts coupled with tax savings can add up to be a sizable savings for any business.
Please consult with your tax professional to ensure that your purchase will qualify for the Section 179 tax incentive.
© NetFunction Inc. and Adventures in HIT and BIT, 2010.