If you’re a business owner in Houston or anywhere else, beyond the normal end-of-the-year things on your mind, you’re most likely already looking ahead to your 2020 taxes.

Because there are only a few more weeks left in 2020, it’s important to consider any purchase you may want to make that can be used for tax deductions and reduce your tax burden for the year.

This year’s business deduction under Section 179 of IRS Form 4562 has been increased to an allowable deduction of $1,040,000. There is also a bonus 100% depreciation deduction on purchases of new or used computers and office equipment. 

Technology purchases are a great investment in your business and can set you up for more success in 2021 through use of cloud services, more efficient computers, better cybersecurity, and more.

Now is the perfect time to meet with an industry IT professional, like Digital Crisis, to target the most cost-efficient, tax-deductible upgrades that can positively impact your bottom line.

Let’s go through allowable deduction types and what that might mean for improved productivity for the new year, in addition to a tax write-off.

IT Upgrades Eligible for Tax Deductions

Off-the-Shelf Software

One of the allowable tax deductions is off-the-shelf software. This means software that you purchase that isn’t custom to your company, and is publicly available.

If you’re not happy with using the public cloud through a SaaS subscription, one consideration is to move to a private cloud environment where you have complete control over the software environment your company uses.

It’s estimated that 20% of enterprise workflows are private-cloud based.

Software that you purchase to run in a private cloud environment on a cloud server would be deductible, and you would increase your security and control over your cloud environment.

Computers (New and Used)

Computers that you buy or finance during 2020 can also be used for tax deductions from your business taxes. This includes both new and used/refurbished devices, as long as the equipment is “new to you.”

If you have computers older than four years, then you may actually be losing money on them every year. So, an upgrade to a new computer not only saves you immediately, it also reduces your taxes.

Computers older than 4-years have the following issues in comparison with computers younger than 3 years:

• 2x as much downtime
• 3x as many data loss incidents
• 3x more security breaches

One other area to consider for new computers is your remote workers. If you have employees working remotely and using their home PCs, this can cause problems for IT security and performance/productivity. 

You may want to consider a purchase of business laptops that could be used both at home and work, for remote and partially remote staff. 

Office Equipment

Another Section 179 tax deduction category is office equipment. This could include things like routers, wireless printers, IoT sensors, and other types of equipment to upgrade your IT infrastructure.

A few upgrades to consider in this area are:

• Network Upgrade: Upgrading to a mesh network and/or a Wi-Fi 6 router, can significantly improve network speed, security, and performance.
• On-Premises Firewall: Firewalls with advanced threat protection can keep your network and endpoints secured from multiple types of sophisticated threats.
• A/V Equipment for Video Calls: Video meetings have become the new “meeting,” during the pandemic, so you may want to consider an upgrade of A/V equipment. This could include a sound bar, smart TV, and similar meeting technology designed for high-quality video calls.

Cellular Telephones

The IRS notes that “cellular telephones, similar telecommunications equipment” are considered deductible tangible personal property. 

How you might use this deduction category to upgrade your office may be to purchase tablets to use with software designed to replace manual tasks. For example, if you have a manual meeting room reservation form on paper, you can make the process much more efficient using a cloud tool like Microsoft Lists run via a tablet.

 You may also want to consider any company cellphone upgrades that will improve productivity.

Security Systems

Security system components are also a technology tax deduction you may want to consider. Modern cloud-based security solutions make setting up a surveillance system easier than ever, without any messy wires to install.

IP security systems are also designed to be easy to add on to, so you could purchase just the base components before the end of the year for the deduction, then add other cameras on as you like to expand the system’s capabilities. 

Schedule a Year-End Technology Assessment with Digital Crisis

A year-end technology assessment can help you narrow down your options to the best and most critical IT upgrades that will have the biggest positive impact on your bottom line.

Contact us today to schedule your assessment. Call 713-965-7200 or reach us online.

Office networks have been coming under increased strain over the last few years as more activities fight to be first in line for bandwidth, causing all sorts of issues with the internet quality around the office.

About 15 years ago, computers and servers were the main devices connecting to wireless business networks, and it was generally for email or to download a file. But today, networks have multiple devices demanding their attention, including smartphones, tablets, and IoT devices.

Another big demand has been the need to stay continually connected to cloud services throughout the day. Most companies have now switched to cloud platforms like Microsoft 365. This year has also seen a sharp rise in video conferencing due to the pandemic.

The average employee uses 8 different cloud applications in their workflow.

All this activity can cause bandwidth to run thin for some applications, leading to things like stalled backups, interrupted video calls, and problematic internet quality throughout an office.

One way you can improve internet quality is through a feature that most routers have called Quality of Service (QoS).

What Does Quality of Service Do for Bandwidth?

QoS is a way to direct bandwidth traffic and prioritize which activities are most important. 

When a router does not have QoS rules set up, it doesn’t know who to serve first when devices and applications are demanding bandwidth. The ratio of supply and demand greatly affects your internet quality.

You can think of it as the dinner rush at a fast-food restaurant without any lines to organize the traffic. Everyone is just coming in and demanding attention and the staff doesn’t know who to serve first. Some will get their orders, others won’t. Some customers may start to order but end up having another order bump theirs.

This is what happens to your bandwidth allocation when you don’t have any Quality of Service rules. The router is like the restaurant staff with a lobby full of demanding customers and not knowing who to serve bandwidth to first.

What QoS does is put in priority rules that tell the router which activities should get top priority for bandwidth allocation and which applications can wait their turn.

Here are the basics of how QoS works.

Prioritize All Bandwidth Needs

Routers that support QoS will have an area in the router administrative settings for QoS rules to be added.

You will get to choose a variety of different priorities, which are basically your speed lanes for each online activity.

Router settings will vary according to the manufacturer, but you will see options such as:

• Highest
• High
• Normal
• Low

Choose Activities by Device, App, Port

You have several options for how you can prioritize bandwidth. 

For example, you can designate that any activities happening on the CEO’s computer will get priority for bandwidth allocation. Or you can designate that whenever your VoIP phone system is being used by any device, it gets the highest priority, so bandwidth isn’t taken from it by a large download.

You’ll typically be able to prioritize your bandwidth by:

• Device (using the device’s MAC address)
• Ethernet port
• General activity (like “video streaming”)
• Specific application

Priorities Act as “Traffic Lanes” for Bandwidth

Say you set your video conference application as the “highest” priority in QoS rules and your FTP activities (uploads/downloads) as a “normal” priority. This means that if you are on a video conference and someone at the office starts a large upload, the router will not allow bandwidth to be taken from the video call.

This stops problems like video calls suddenly freezing or dropping out due to a loss of bandwidth that’s being allocated to something else.

QoS rules set up “traffic lanes” for your bandwidth keeping everyone in their own lane, so the most important applications are being served their bandwidth first, before less important internet activities.

By putting in these priorities, you help your entire network to run more reliably and bandwidth is available on a more consistent basis.

Further Improve Your Internet Quality by Monitoring Activity

Using QoS, you can also monitor bandwidth usage throughout the office, which can help you identify any timing problems when it comes to things like large cloud backups or other bandwidth-heavy activities.

By knowing how different apps and devices are using bandwidth and how that may impact other critical functions, you can better schedule certain activities to avoid bottlenecks.

Monitoring also gives you insight into any suspicious bandwidth activities that might point to a breach of your network.

Limit Bandwidth on Non-Work Activities

QoS also gives you more control over how bandwidth is used by allowing you to limit bandwidth on certain non-work activities. For example, you may decide to limit the total bandwidth that can be used for gaming, which employees may be doing when on breaks. 

YouTube streaming might be another target application that you don’t want taking bandwidth from more important activities.

How Reliable is Your Wireless Network?

Digital Crisis can help your Houston area business get a handle on your bandwidth use to improve the speed and reliability of your network. 

Contact us today to schedule a consultation. Call 713-965-7200 or reach us online.