We think we're safe when we say that 2020 has been…less than ideal. After the first quarter, we quickly found ourselves — both professionally and personally — in uncharted waters. But, 2021 is just around the corner and we want to be optimistically prepared.
The continuation of this month's series of section 179 tax deductions covers how the rapid changes of 2020 can actually benefit your 2021. The good news is that this is actually good news!
As a disclaimer, be aware that we are not tax professionals and this article should only be viewed as informational. Before making any changes related to your company's taxes, consult with your company's CFO or other tax professionals.
Overcoming 2020 - The Worst Crown Ever
Who would have thought this time last year that the entire world would be crippled by a tiny little organism? COVID-19 changed everything overnight. For the most part, those changes were devastating. Of course, hundreds of thousands of people have already lost their lives by the time of this writing. Many businesses have also shut their doors or drastically cut back operations.
What seemed like temporary changes (such as sending your employees home to work) soon became the new normal. Businesses like Zoom became overnight successes because of the change in the landscape. We don't know what will happen with COVID-19 in the coming months or years. We believe, though, a lot of these changes are probably here to stay. So, your company may as well make the most out of it.
Prepare for 2021: Be Smart About Deductions
Most companies had to make changes besides simply sending employees home. Perhaps they had to change or upgrade software, purchased equipment for employees to use remotely, or simply had to downsize. These are all examples of things that can be written off at the end of the tax year.
As a refresher from our last article, the more you spend, the more you save. Even though you may have shelled out more than originally budgeted to accommodate for 2020 challenges, at least you can avoid paying tax on those expenses. What are some examples of changes in the last year you can get some benefit from?
Maybe you found that your company needed more mobile hardware to address a more mobile workforce. Write-off.
Perhaps you moved office space as the decreased workforce (either from layoffs or employees working from home) didn't justify your former space. Write-off.
Even better, maybe you took our advice and decided to migrate to a hosted environment or virtual office. First of all, thanks for listening! Second, write-off.
If you haven't done any of this, you still have two months to upgrade your business operations. While these deductions don't make the upgrades free, they do make the decision much less painful in the short term. Then, the upgrades themselves make it worth it in the long term.
Prepare for 2021: Don't Just Sit There
If you're reading this article right now, we congratulate you on surviving in an extremely difficult environment. If you want to remain in business and even grow in the coming years, it's time to make some upgrades. Now is the best time, as well, while you can utilize the benefits of tax write-offs.
One of these changes is the aforementioned virtual office. It essentially involves creating a virtual workspace where employees can log in and do any of the sorts of work that they would do in a physical office. The primary benefit of a virtual office is allowing your company to be flexible; giving you the option to have employees anywhere in the world and yet still be productive.
This virtual office setting not only stores data like in a traditional cloud solution, but it includes all software and line of business applications to facilitate full productivity. When administered by an experienced company such as ourselves, you end up having a very lean yet safe solution.
If you want to see how your company can get itself in a leadership position in this new climate, contact us and see how we can help put your section 179 tax deductions to work for you!