No? Then we have some bad news for you-you’re already behind. But it’s not too late to start now…
While it may just be the beginning of the holiday season, it’s vital for you to start doing your budgeting right now. The further ahead of the process you get, the better prepared you’ll be, and there are more benefits you can take advantage of.
Why Should You Start Your 2019 Budgeting Now?
While there are plenty of reasons to do anything ahead of time instead of procrastinating, in this case, there is one key reason to start your 2019 budgeting right now…
The end of the year is quickly approaching; before you know it, 2019 will be upon us.
What many small businesses don’t know is that this is the prime time to incur expenses before the end of the year. Businesses that are strategic with their finances typically benefit from minimizing taxes by lowering reportable annual profit.
If expenses are due to hit early in 2019, and your business accounts on a cash basis (as many smaller organizations do), it would benefit you greatly to incur the cost by the end of 2018 instead.
But that’s just general tax strategy – what if there were even more reason to start your budgeting process right away?
(Hint: there definitely is).
Specifically, you should be paying attention to Section 179, which allows you to expense up to $1,000,000 of qualifying property for 2018. This is phased out dollar for dollar by the amount that the combined amount of eligible Section 179 property exceeding $2,500,000.
However, you should also note that it is subject to a business taxable income limitation. The portion of a Section 179 deduction that generates a taxable business loss is carried forward to the next tax year.
Pass through entities are subject to this limitation but business taxable income is increased to account for salaries or guaranteed payments to partners (you will need to override business income under depreciation options and overrides).
At the individual level, W-2 income is part of the overall business taxable income calculation. Make sure that the tax software you’re using automatically counts W-2 income.
See why it’s important to start thinking about your budget and taxes right now?
We’ve got even better news…
Do You Know About Section 179 Bonus Depreciation Too?
While this originally only applied to new property, as of September 27, 2017, used property is also covered as well. The point is that you can now elect out of bonus depreciation for a particular class of property (all or nothing) – for example, such as all 5-year property.
Great news, right?
Well, maybe you’re still not enthusiastic about starting your budgeting process. Even with all this great information, and opportunities to save money in taxes, there’s still one main hurdle – you have to actually go through the budgeting process.
At a time when you’d rather be planning the company holiday mixer, finding the perfect presents for your family, or booking your vacation in a more tropical setting, it’s understandable that the last things you’d want think about are taxes and spreadsheets.
We get it – this is a busy time of year both in business and in your home life, and so, budgeting in time to take advantage of key Section 179 benefits shouldn’t be quite such a tedious process…
Here’s the thing – it doesn’t have to be. That is, if you know how to go about it, and who to work with.
What’s The Best Way To Manage Your Budgeting Process?
By getting a head start on your budget, you could potentially save thousands of dollars in tax deductions when it comes to your business’ IT.
Use this deduction calculator to get a better idea as to what you could save by the end of the year, and carry over to invest in the next. Eligible technology includes software and hardware (both specialized and generic), and even office furniture!
Need a hand with your IT budgeting? Reach out to Intelice Solutions right away for an expert consultation.
However, please keep in mind that Intelice Solutions is your Washington DC IT support provider, and while we can offer you our advice, you should direct any questions about the finer points of Section 179 to your CPA or tax attorney.
Like this article? Check out Why Frederick Companies Are Turning To Intelice For Technology Services, Is Your Washington DC IT Company Taking Ownership To Protect Your Data? or A Federal Government Contractor Looks To Intelice Solutions For Help With Their Growing Technology Needs to learn more.