Reduce your 2024 Tax Burden with an updated POS

by Chandra Spary-Kontinos | Dec 27, 2024 | POS Systems, Business to Business News, News

Could a Point of Sale save you on taxes this year? The answer is, most likely, yes!  As the end of the year approaches, it’s time for business owners to start thinking about ways to reduce their tax burden. One effective strategy is to take advantage of the Section 179 tax deduction. This provision in the U.S. tax code allows businesses to deduct the full purchase price of qualifying equipment and software purchased or financed during the tax year. Doing so can significantly lower your taxable income and, consequently, your tax liability.

Section 179

Section 179 was designed to encourage businesses to invest in themselves by purchasing equipment and software. Unlike traditional depreciation, where the cost of an asset is spread over several years, Section 179 allows you to deduct the entire cost in the year the asset is placed in service. For 2024, the maximum deduction limit is $1,160,000, and the total equipment purchase limit is $2,890,000.  To take advantage of Section 179, the equipment or software must be used more than 50% of the time for business purposes.

Qualifying purchases include: 

• Machinery and equipment (POS Systems)
• Business vehicles with a gross weight of over 6,000 lbs
• Computers and software (Payment Software)
• Office furniture, supplies, and fixtures  (Office Supplies)

Consider upgrading your business with a new POS system!

It’s important to note that not all business expenses qualify. Real estate and inventory are examples of non-qualifying expenses. One of the key strategies to maximize your Section 179 deduction is to make your purchases before the end of the year. By doing so, you can ensure that the equipment is in service during the current tax year, allowing you to take the full deduction. This can be particularly beneficial if your business has had a profitable year and you’re looking for ways to reduce your taxable income.  While the immediate tax savings are a significant benefit, investing in new equipment and software can also improve your business operations. Upgrading your machinery can increase productivity, enhance the quality of your products or services, and even open up new revenue streams.

Updated Technology

Additionally, newer technology can lead to long-term cost savings through improved efficiency and reduced maintenance costs. As the year draws to a close, it’s a good idea to review your business’s financial situation and consider making strategic purchases that qualify for the Section 179 deduction. Doing so allows you to enjoy substantial tax savings while investing in your business’s growth and success. Always consult a tax professional to ensure your purchases qualify and maximize your tax benefits.