Preparing for 2021: Leveraging Tax Benefits and Adapting to the New Normal
It’s safe to say that 2020 has been an incredibly challenging year for individuals and businesses alike. We have all navigated uncharted waters, both personally and professionally. However, as we approach the new year, it is essential to adopt an optimistic and prepared mindset for 2021.
Continuing our series on Section 179 tax deductions, we want to highlight how the rapid changes we experienced in 2020 can actually benefit your business in the year ahead. The good news is that amidst the challenges, there are opportunities to optimize your tax situation.
Disclaimer: We are not tax professionals, and the information provided in this article is for informational purposes only. Before making any decisions related to your company’s taxes, it is crucial to consult with your CFO or trusted tax professionals.
Overcoming the Challenges of 2020
The global impact of COVID-19 has been nothing short of profound. It brought about sudden and drastic changes, resulting in devastating consequences for many businesses and individuals. Lives have been lost, and numerous businesses have faced closures or significant operational reductions.
What initially seemed like temporary adjustments, such as transitioning to remote work, quickly became the new norm. The business landscape underwent a transformation, with companies like Zoom experiencing unprecedented success. While the future of COVID-19 remains uncertain, it is likely that many of these changes will endure. As such, businesses should embrace the new normal and make the most of the opportunities it presents.
Preparing for 2021: Maximizing Deductions
In addition to transitioning to remote work, many companies have made other necessary changes to adapt to the challenges of 2020. These changes may include software upgrades, purchasing equipment for remote employees, or downsizing operations. It is important to note that these expenses can be written off at the end of the tax year.
As a reminder from our previous article, the more you spend, the more you save. Despite potentially exceeding your initial budget to address the challenges of 2020, you can benefit from tax deductions on these expenses. Consider some examples of changes that occurred in the past year:
- Investing in additional mobile hardware to support a more mobile workforce? Write-off.
- Relocating to a smaller office space due to a decreased workforce or remote work arrangements? Write-off.
- Embracing a hosted environment or virtual office solution? This not only improves efficiency but can also be written off.
If you haven’t made any of these changes yet, there is still time to upgrade your business operations. While these deductions do not make the upgrades free, they certainly make the decision more financially manageable in the short term. Additionally, the long-term benefits of these upgrades make them worthwhile investments.
Preparing for 2021: Embrace Change
If you are reading this article, congratulations on successfully navigating an incredibly challenging environment. To thrive and grow in the coming years, it is crucial to make the necessary upgrades. The timing couldn’t be better, as you can take advantage of the benefits of tax write-offs.
One change to consider is the implementation of a virtual office. This concept involves creating a digital workspace where employees can log in and perform their work as they would in a physical office. The primary advantage of a virtual office is the flexibility it offers, allowing employees to be productive from anywhere in the world.
A virtual office not only provides secure data storage, similar to traditional cloud solutions, but also encompasses all necessary software and line-of-business applications for seamless productivity. You can achieve a streamlined and secure solution when working with knowledgeable professionals like ourselves.
To position your company as a leader in this new climate, contact us to explore how we can help leverage Section 179 tax deductions for your business. Together, we can navigate the challenges ahead and unlock the potential for growth in 2021.