End-of-year Tax Planning

3 considerations for your end-of-year tax planning


Your accountant’s favorite expression at this time of year might be something you thought you would only ever hear from your parents. Never put off till tomorrow what you can do today.

1. Buy today to minimize your 2015 tax bill

Hardware moves on, so the need to upgrade is almost as inevitable as death and taxes. The good news that your 2016 IT upgrades could come with substantial savings on that unavoidable 2015 tax bill.

Six-months’ depreciation

If you think you might upgrade in 2016, buying now could reduce your tax bill significantly. Buying IT equipment and getting it working before the end of the year could earn you a whole six months’ depreciation. Under the “half-year convention,” you get six months’ worth of depreciation deductions in the first ownership year, regardless of how long you were using the equipment.

Business property expensing

Although the business property expensing option has been cut back in 2015, you should still consider buying and using new IT equipment. For tax years beginning in 2015, the expensing limit is $25,000. (And legislation might retrospectively make for more generous provisions.)

2. There are excellent end-of-year deals to be had

You know now is a great time to be taking advantage of tax breaks and unspent budget. And suppliers know it too. That is why there are some exceptional deals on at this time of year.

Take stock: do you or your employees need new computers, tablets or smartphones for work? Is your business software up to date?

Are you losing time and money because employees are waiting for computers to boot or software to open? Just 10 lost minutes a day per employee is a week’s work lost per employee every year.

It is not just big companies that are losing money to data breaches, either. Take stock of your equipment and protections for your more valuable information. Is your customer data secure? Are your own banking, financial and employee records secure? Not only should your equipment and software be up to date, but you should be insured as well.

3. Start thinking about your move to the Cloud for 2016

2016 is going to be another year of the cloud. The analysts predict the cloud is where most new IT spending is going to happen for the foreseeable future. For a start, paying for a service as opposed to buying actual hardware means you can expense it all in one year and not have to wait for depreciation. Paying for cloud services instead of buying hardware is also great for cashflow.

Moving email, accounting software and offsite backups are a great place to start. These technologies are the most popular first step into the cloud.


Need advice on new IT projects? Want tips for speeding up your network?  Call us at (484) 753-7200 for IT advice.