The fourth quarter is a great time to consider upgrading your office equipment – both as a magnanimous gesture to your hardworking crew and to bring more efficiency to your operation.

If your business booms in the summer months, chances are you spend a good part of the year focused on keeping up with jobs in the field. But when the weather turns dreary and the work slacks off, it’s time to turn your attention indoors and take the time necessary to consider office needs. Consider purchases you can make before the end of the year that will improve working conditions for your staff and also make tax time less torturous.

Ask employees to look back over the year and determine if any items would have made the business more efficient. Solicit input as to what would make their jobs easier and then consult your accountant about how purchasing those items before the end of the year might affect your tax situation.

 

BUY NEW EQUIPMENT, GET A DEDUCTION

The Small Business Jobs Act of 2010 changed federal income tax code Section 179 to allow businesses to deduct the first $500,000 of equipment purchased in 2011 from their taxable income. Beyond that new service truck you’ve been thinking about, basic material goods that generally qualify for the Section 179 deduction include:

• Computers

• Computer Software

• Office Furniture

• Office Equipment such as printers, fax machines, copiers, scanners, etc.

 

MAKE A LIST, CHECK IT TWICE

Here are some ideas for fourth quarter purchases that can make your company’s New Year a happy one:

Laptop computers. Are your office employees chained to their workspaces because they use desktop computers? Consider purchasing a few laptops. If you haven’t looked at laptops lately, you’ll be pleasantly surprised at how the prices have come down and are more in line with desktop models. Laptops allow employees to take their work home, on business trips or around the office. A laptop could help keep employees on schedule in winter by allowing them to connect to the office when roads are closed or they are home with a sniffling child.

Cell phones. Cell phones can qualify for a Section 179 deduction if they will be used more than 50 percent for business every year that they are in service. It gets a little tricky, so be sure and check with your accountant if you need to track usage charges and if cell phones purchased for employees need to be considered part of their fringe benefits for tax purposes.

Software. If employees are having compatibility issues with the outside world as they go about their daily business, maybe it’s time for a software upgrade. Or, if they’ve mastered basic accounting software, perhaps it’s time to add payroll software. To qualify for a Section 179 deduction, the software must be “off the shelf” or readily available to the public, rather than custom designed.

Ergonomic gear. Comfortable, healthy workers are happy, productive workers. If people in your office have aching backs, maybe chairs manufactured after the Eisenhower administration are in order. To prevent or relieve other aches and pains, consider providing armrests, ergonomic keyboards or lumbar back supports.

Marketing materials. Stylish new business cards could be a gesture of confidence in your sales team. Or could your company benefit from updated brochures? Does your website need a makeover? Spending money on marketing materials and promotional activities can also be written off during tax season.

Membership dues. Joining the state or national association for your profession provides networking and educational opportunities, and the membership fees are deductible. Subscriptions to trade publications or publications from your association are also costs that can be written off. Your staff will benefit from feeling more connected to peers in their field.

Business-related education. Paying for continuing education shows your staff you want to help them excel in their jobs by learning to use newer technology, mastering more effective techniques or becoming familiar with the latest legislation. Money you spend on classes, seminars, conventions or instructional videos is tax-deductible as long as these expenses are directly related to your business and intended to improve on-the-job skills and knowledge. It may be too late to get people into classes (and get a deduction) this year, but worth keeping in mind for the future.

 

A WORD OF CAUTION

It may be the holiday season, but please, don’t play Santa Claus with a sack full of software. Yes, your investment in equipment may make some employees’ days a little brighter, their jobs a little easier, boost their energy and increase productivity. But things purchased for them to use to do their jobs better are not “gifts” and shouldn’t be presented as such, unless you want the Ebenezer Scrooge award. Bonus checks and frozen turkeys are gifts. Laptops and cell phones to be used on the job are tools.

And be considerate. Just as some people can’t wait to get their hands on the latest gadgets and love the challenge of learning new technology, others are intimidated by it. Be understanding of those employees. Make sure they get the time and training necessary to be comfortable with it, and don’t feel bad if your purchase is met with a little grumbling at first from some. And don’t say, “I told you so,” when slow adapters start to see the benefits of the new equipment or software.