Redesign Your Office Before the New Year – Let Section 179 Deductions Work for You!
Is it time for new office furniture? If you’ve been putting this purchase off, you might be interested to know that buying new furniture now could save you a lot of money come tax time. This is possible thanks to something called a Section 179 deduction.
What Is Section 179 All About?
Section 179 was originally put in place to help small businesses. It allowed them to take depreciation deductions on certain capital expenditures in a single year, as opposed to doing so over a number of years. This affords an obvious benefit to the small business, which can take the full deduction for the item’s cost right away.
The Section 179 deduction is especially useful for items with shorter lifespans, such as computers, as these can quickly depreciate or become obsolete.
What Kinds of Items Can Be Deducted Under Section 179?
The type of item which can be deducted under Section 179 must meet two requirements. It must have certain characteristics and, second, it must be put into service within a specific timeframe. These items are referred to as “qualified property.”
It must not only be personal property that the business acquired for the purpose of business or trade but must also be tangible and depreciable. Buildings and land are not considered to be qualified property. However, vehicles and similar items are.
In addition to ensuring the items purchased are qualified property under Section 179, you must ensure that the property is both purchased and put into service in the same year you claim this deduction. “Put into service” means ensuring that purchased items have been set up and are being actively used in your business; it can’t just be purchased and then put away to be used at a later date.
Section 179 Details
There are monetary limits to the items that can be deducted in Section 179. A taxpayer may only elect to claim up to $500,000 per year. Should a taxpayer place items worth more than $2 million in a single taxable year, the deduction then gets reduced according to the amount exceeding the $2 million which was purchased. So, for example, if $2,500,000 of equipment was purchased, the available deduction would be reduced by $500,000.
As well, the amount you wish to deduct in a taxable year must not exceed your aggregate income from the active business or trade for that year. However, should part of a Section 179 deduction not be allowed for a year, this amount can be carried over to the following year depending on the current Section 179 rules.
Business Vehicles and Section 179
If you have purchased a vehicle for your business, you may deduct up to $25,000 of the cost of the vehicle. However, the vehicle must be rated at more than 6,000 pounds gross vehicle weight, but not be rated more than 14,000 pounds gross vehicle weight.
This means that the purchase of a recreational vehicle would not be eligible for deduction under Section 179. However, a bus, commuter van, or another large commercial vehicle would not be impacted by this limitation.
The Best Time to Redesign Your Office Is Now
The great news is that there is still time to purchase new office equipment in order to qualify for a Section 179 deduction in 2018. Now your only decision is where to begin. An office redesign can have a significant impact on employee productivity and efficiency, but what should you buy?
Some say that your employees are the ones to talk to first. After all, they are the ones who will be using the items you purchase. Some of your employees may have specific requirements which need to be addressed. Others may have good ideas that may be missed unless you ask them.
Leave plenty of time for all employees to have a say, but set a deadline that allows everyone to voice their opinions and concerns, and which allows you to review them.
Important Office Elements
There are several elements of your office that may benefit from a redesign, including technology, new furniture and privacy.
If your business is currently being conducted using soon-to-be obsolete equipment and technology, then the efficiency and productivity of your employees are most likely being negatively affected. This is because old technology and equipment can make even the simplest tasks far more difficult than they need to be.
The addition of new computers and other technology not only will help keep employees motivated, but new executive office furniture will also save you money due to the fact that new computers are more energy-efficient than their older counterparts.
It is now known that the addition of quality office furniture to your space increases employee productivity. Why? Because when employees have the right furniture, they gain numerous health benefits.
For example, when you choose ergonomic chairs that are also adjustable, your employees have the freedom to optimize their own comfort while they work. The more comfortable they are, the more productive they will be.
The same is true of the right desk – whether it’s a traditional desk, a benching system or a sit to stand one. If your employees are forced to work at desks that are too small to accommodate their computers and file folders or other items, it’s likely that their desks will be messy, and that’s not a good thing.
A desk that’s too small or the wrong type encourages clutter, which can add a lot of stress to the workday. If an employee has to move or lift several items in order to get to the item they need at any given moment, it is time for a new desk.
When employees can work from a chair that promotes good health and good posture, and they have a desk with plenty of storage that makes the organizing of important documents easy, they will be much more likely to stay motivated and experience less stress.
In addition to all of the “common and collaborative spaces” your office may have, it’s also vital that your employees have areas where they can use office furniture that allows them to work privately and quietly. This is so important because privacy in a quiet space can also improve employee productivity.
If your office tends to be a hectic and fast-paced space, your employees may be dealing with several interruptions throughout their day, which is likely having a negative impact on their energy level and, ultimately, their productivity.
Of course, not all employees will handle distractions and interruptions in the same manner, but if employees need to be able to concentrate on a special project or even need to make a personal call, they need to be able to have this opportunity.
The best solution for such a variety of employee working styles is to have workspaces that are suitable for completing a number of tasks, and that have been aligned with those different working styles.
When you invest in quality furniture and technology for your office, you are making a long-term investment in employee productivity and, ultimately, an investment into the success of your business.
It’s true that purchasing new equipment, furniture, and other items will cost you money up front. However, as stated previously, as long as you put your new items into service before the next taxation year, you can get a deduction via Section 179 when you do your 2017 taxes.
Not only that, but, when you make an investment in quality furniture, you can ensure it will last, allowing you to avoid having to spend again in just a few years’ time for more business furniture.
One of the greatest benefits of making investments into new furniture for your office is that it can also benefit your sales business. Your new office and reception area furniture will make an impression on any clients that enter your place of business. Your new look will not only communicate professionalism but will also elevate your image to clients and competitors alike.