Section 179: The Ultimate Guide to Deductible Technology Business Assets - Webinar
Mike Bazar: Well, hello, everybody. We'll stall and make chitchat for a minute while everybody kind of pops in and audio connects and does all the normal Zoom things that happen. But, yeah, today we wanted to talk about Section 179 and using that for deducting assets, saving money on taxes. I think most of us probably agree we would love to give the least amount possible to Uncle Sam and keep that hard-earned money. And so, this time of year, when we get kind of the end of the year, we really start looking at this with customers and other people and just trying to talk about what is there to do that. So we'll talk through that a little bit, but to kind of get into a few things. So, Jake and I are both on this call.
Mike Bazar: My name is Mike Bizarre. I'm the CTO here at Bazaar Solutions. I started an MSP in Lubbock, Texas, several years back. And this year, Will and I merged our two businesses together. So, Will is the CEO. We're equal partners in kind of this new vector choice venture. So, I've been doing this for a while. Went to the School of mines. I'm a nerd by profession is really what that says. So not only am I an IT nerd, but I'm also an engineering nerd. So, I'm about as nerdy as I can get as you go. And then Jake, who is much less of a nerd, is on the call. That's what we got. It's like Yin and Yang here.
Mike Bazar: So, he's here to balance out my, he's, the short version is, Jake's done a lot of sales for a lot of different people and operations and some other stuff. And so, he's our VP of business strategy. And so that's, we kind of get in this a lot where one we're looking at from a technical perspective for customers of, hey, what, computers and things are old, and then Jake's looking at what are those quotes and what do we need to do to get that stuff out and replaced and everything else. And so, we both together, I think, bring a good set of experience to this and a good viewpoint kind of, and going through it. And then a fun fact about Jake is that he played on the Olympic soccer development team, men's, not women's.
Mike Bazar: And anyway, so if you ever love talking golf or soccer, Jake's your guy.
Jake Mitchell: You never know nowadays, men's or women's.
Mike Bazar: And then real quick, too, as we're getting through it, if you guys have questions, use the Q and A or the chat. We'd love this to be interactive as we get through and start talking about things, put in those questions as you go. And we'll definitely have some time at the end for Q and A and that sort of thing, but a little bit of just vector choice and who we are. So, we've ink 5000 last couple of years. We've been on that, the Titan 100. We were on the MSP 501 Inc. Regionals in the Southeast in 2002, kind of before we merged.
Mike Bazar: And so, all of that, not toot or own horn a little bit, but mostly to say, I think we've been around the block a few times, know what we're talking about, not kind of fly by night and have enough expertise to be able to kind of speak to that. We cover a huge range of the right we've, as we merged, mostly because we own the building, we moved the corporate office to Lubbock, Texas, but we've got offices you can see on the left hand side of the screen, know, across Texas, Louisiana, into Georgia and then all the way up into Philadelphia and have done work in a whole lot of other states around as. So, you know, we've got a solid reach, I guess, as we start talking about how do we help service and support customers and what they are doing.
Mike Bazar: And we've dealt with customers as small as one and two users, all the way up to over 1000 users. So, we've got a real wide range of experience, especially when we start talking about this kind of stuff and budgets and planning and some of the kind of bigger things. So, we want to talk about what is Section 179, qualifying assets, things that would fall under it, what are the benefits, how do you claim it? And just kind of talk through that. And like I said, this will be a little bit of kind of back and forth off of Jake and me. And then I really do encourage you guys to ask questions as we go along because I think those always make for better webinars and we can talk live about questions as they come up.
Mike Bazar: So, the first question I think a lot of people probably ask if you're here, is what is Section 179 and how do you use it? So, Section 179 was written a long time ago on the tax code. I think a lot of people just think of it as buying a car, maybe if you're a business owner. Right. That's where a lot of people think about, I'm going to deduct a car that is absolutely something you can do with it. And that's what a lot of people do. With Section 179, but it basically allows you to deduct the cost of an asset up front. So, something you may be paying for over time.
Mike Bazar: You get to write that off up front, and there are certain kind of rules and guidelines around it, but it allows you to see tax savings this year for something you might implement over the next several years and can really help pull that kind of forward. And that's what we want to talk about and then kind of some strategies that we use and I've seen our customers use and other things around that. But the big side of this is, and I always caveat this, I don't think you should just go buy stuff to lower your tax burden, but I do think there's a lot of purchases that need to be made that maybe we're going to make in the first half or first quarter of next year.
Mike Bazar: And if you pull it to this year, you can get that tax write off, or maybe it's a big project and you're going to kick it off early next year. Well, if you can start that project and implement some of those things and then maybe kick payments out over time, you can take advantage of all the tax write offs right up front, which can be a really big cost savings down the road, just depending on the projects and what you're doing. So, to qualify for a section 179 deduction, an asset has to be tangible. It's got to be used for production of income in the business.
Mike Bazar: So again, that's where people can get in trouble because they go out and they buy a car and then it's just a personal car and they drive around, and you can't tie it back to the business any which way. And a lot of CPAs will slap your hand if you're doing that and know, I guess that's the one. I don't know, the caveat in all of this is make sure you are talking to your CPA before you just decide that you can do know, talk to the professionals that are filing your taxes and really thinking about that. But anyway, it's got to be used in the production of business income and it has to have a useful life of at least a year. So, you can't go buy some really expensive thing.
Mike Bazar: You can't go to Disneyland with your family and then be like, I'm going to put that as a Section 179 deduction. It was really designed around people and companies buying equipment that they needed to expand capacity, produce more income, increase productivity, those sorts of things is really what this is kind of geared into. And that's why cars and vehicles qualify, because if you need a company vehicle, it absolutely can qualify. And some other examples of that would be computer hardware and peripherals, servers and network equipment. Software can actually qualify. And we're debating this as we're putting this together. A lot of people want to do things like software as a service or something. And the reason why that doesn't necessarily qualify is it's an operational expense. Right. It's OP-Ex. And usually, Section 179 assets are capex. They're capital expenditures.
Mike Bazar: But what would qualify is say you're an accounting firm and you want to buy a big new piece of accounting software and it's going to cost 50,000 or $100,000 you could buy that software, but maybe you take a loan out on it or you set up a payment plan or whatever it is, you could then potentially deduct the entire cost in year one, even though you're paying for it over a few years and spreading that cost out. So even things like software can qualify for that. Again, we get the question like, hey, if I bought Office 365 and pay for the whole year, I get a better deal. And it's just an expense anyway. So, you don't need Section 179. You already get the expense on your books, which lowers your tax burden.
Mike Bazar: So, there are certain things that are a little bit, I don't know, a grayer area in terms of when you're looking at it, making sure it's done right, machinery, equipment, security systems, things like that you might do, access control even could potentially be. Again, I would talk to your CPA about some of those because you want to go back to it has to be used for the production of income. So just having a security system might not. But if you are a jeweler and you're selling high dollar stuff, a security system helps protect those assets. I'd talk to an accountant about that, but I would certainly think that there's opportunity there. And again, it depends on how you pay for it, because if you just pay for it, all right, now you don't need Section 179, right.
Mike Bazar: A lot of this is where you're looking at bigger projects that maybe you want to spread the payments out over a year. You'll get a loan to do part of it or whatever it might be, like a car, those sorts of things. Because again, if you pay for all of it right now, it's an expense on this year's books. You don't have to have Section 179 to be able to do that. The big benefits when you're talking about this, right, is you get to increase your profitability by lowering your tax burden. You increase your profitability and can increase your cash flow and business investments, like all those kinds of tie together of if you get things that are increasing your productivity.
Mike Bazar: And so Jake and I were chatting about this a little bit before, but intel did this study a while back, and I know it's intel, so take it with a grain of salt, but they basically said if you replace your computer at year three instead of year four, like if that's the cycle every three years, you're replacing instead of every four years, the increase in productivity over that twelve months actually pays for the additional cost of buying computers more often. Now, again, I think intel is probably trying to sell more computers, but we have a lot of people that try to push computers to four or five or six years. And what really is happening is those computers are getting significantly slower and people aren't doing as good of a job.
Mike Bazar: Their productivity is down, which means you might end up hiring or investing in tools you don't need to simply because you tried to push hardware farther than it should go. Right. We see that a lot with servers and network equipment where people don't want to maybe upgrade that sort of stuff. Wireless equipment has gotten significantly faster over the last couple of years, and that's an opportunity potentially to replace some of those things and look for one of these deductions, because now software will run quicker. The computations, things people are doing in the office is a little bit quicker. And that all makes for increased productivity and profitability in the end of the day. And so, I don't know. Jake, do you have anything to add?
Jake Mitchell: I just say that I find that we send quotes out to folks whenever we see a device that needs to be replaced, and it feels big at that time, right. And it's pushed out. It gets pushed out and pushed out, and then before you know it, you've got 15 computers that need to be replaced. You've got a firewall that needs to be replaced. You've got a switch that needs to be replaced. And at the end of the day, what we recommend is that you budget this stuff, right? I mean, you come up with a plan. Nobody wants to spend a ton of money just at the end of the year unless you had a good year. If you had a good year, spend all the money.
Jake Mitchell: But if you had a decent year, plan that out, right? I mean, plan it out so that you've got to replace a couple of computers a month. Section 179 will allow you to kind of start that plan right, or maybe.
Mike Bazar: Jump start it right. We neglected, let's do a bigger chunk now and maybe take a loan or lease or whatever. It's the end of the year. A lot of the time we can go to Dell, HP, all these manufacturers will finance, they will do low percentages or lease to own or all these things that you could then spread payments out and say, okay, let me get caught up on this old equipment I didn't buy for the last five years. We had a good year. Let's get caught up. But I can write off all of that expense this year, even though I'm paying for over the next year, two years, three years, whatever that might look like. And like I said, there's a ton of these manufacturers that will help do reasonable financing because they just want to move product. That's what they want to do.
Mike Bazar: It always amazes people because I've done this a couple of times where we'll go back to one of our distributors or vendors and say, hey, here's this deal. They'd like financing. And I've done a couple of times where we took a Dell deal with a bunch of Dell computers and HP financed it. And they're like, what HP Finance is HP Finance. They just want to finance good deals for good companies. They don't care if it's HP equipment or Dell equipment or whatever else.
Jake Mitchell: I'm going to stop you there from a sales perspective. If you have trouble financing, come see me. And I say that jokingly, but truthfully, we've got so many vendors out there that want to give us money. They want to give you money, they want you to finance it through them. So, if you think that the only option is through your local bank or maybe you don't have any other vendor, come and see us because we've got some options that maybe you might not be privy to or maybe your IT guy might not have access to. We've got a ton of options. So, I just say, come talk to us.
Mike Bazar: Yeah, we did a deal a while back with Cisco, and it was like as long as 20% of the deal was Cisco equipment, they didn't care, and they financed a bunch of Dell servers and everything else. But because we had enough Cisco equipment, Cisco had the best financing deal and was happy to do it, to move their equipment as part of that deal. So, there's a whole lot of options that come out there that we can go back to. These companies that have financing arms, and truthfully, they're all big publicly traded companies, right? HP and Dell and Cisco, they're just trying to hit numbers. And so, they, especially as the end of year rolls around, are willing to give crazy deals sometimes just to move some numbers of quantity of equipment or whatever it is.
Mike Bazar: And salespeople are trying to hit quotas, so they're willing to give a bigger discount to get stuff through the door. So, all this stuff can come together and can be beneficial where we can go find some of these really good deals towards the end of the year and leverage that anyways.
Jake Mitchell: And I also add that you were talking about efficiency, Mike. If you want your business to run well, you've got to have the proper equipment. And if you're operating off your Internet service provider's router and maybe some switch that you bought at Best Buy, I'm telling you your network's not running right. There's a lot of improvement that can absolutely be made. And this is the perfect time where you can take, it's not a ton of money whatsoever, but you can take advantage of this code because who doesn't like loopholes? We all love loopholes.
Mike Bazar: And on that, there's no minimums, right. What it really is, the benefit, like, if you're just going to pay for a computer, again, that's an expense that happened this year. It's not Section 179. But if you need ten computers and you end up financing that you can get the whole write off and move that forward. And that's where these benefits can be, where you're catching up on old technology, doing bigger projects, working through things that maybe you've thought about, maybe you've really thought about, hey, how do we move to a hybrid workforce? And to do that, I need to buy laptops, and we're going to move servers to the cloud, and there's going to be this bigger project to do well, we can help find ways to make that beneficial, find financing or whatever might need to be to push that over time.
Mike Bazar: So, your payment is easy, but then you get all the tax benefits this year. And so that's why we always kind of talk about this at the end of the year because you're starting to look into your tax situation. It was a good year. How do we do these things? How do we move forward? And, man, I'd love to go do that project to move totally to the cloud and let people work remotely, but it's going to cost a lot of money. And how do I do that? Great. Let's figure out how to get that financed out, get the benefits of it today for your employees, for your business, for the tax benefits, and then you just end up paying for over the next twelve months or three years or whatever.
Jake Mitchell: And I'll also add this, that we didn't learn about this because we studied tax code. We learned about this because we have a lot of CPAs as our clients. And what we learned over the years was November comes along, December comes along, and they ask us to please send the invoice before December 31. And eventually we started looking for it and talking to our clients. And I can guarantee you 90% of the clients of our clients that take advantage of this are all CPAs because they know that they're taking advantage of what's out there.
Mike Bazar: Yeah, and there's some things too, and we'll kind of keep moving on here. But we even have customers. And again, this isn't Section 179. It's just trying to help from a business perspective that they say, hey, instead of buying that Office 365 monthly, can I pay for it annually in December? And we're like, sure. And then they get that annual cost, they get the tax write off. They don't have the ongoing cost next year, and it's an operational expense. Again, it's nothing special. It's just you're pulling an expense forward. But even those can be things. Just talking about general tax strategies that you might look at and say, well, does this make sense? Because I'm going to spend the money anyways over twelve months.
Mike Bazar: If I buy it all now, I get a tax benefit, and Microsoft will give you a better deal if you pay for it all at once. So, there's a couple of benefits that you can actually capture where a lot of the time we just buy things and do things the way we've always done it. And it's just that way. So, it can be a really good strategy, I guess, to overall save some money. If you can swing it financially, it was a good year or whatever to pull some of those expenses forward.
Jake Mitchell: I'm going to double click on that. So, if you don't know whether or not you qualify or an expense qualifies, my email is going to be at the end of this. You can reach out to us directly and I'm more than happy. Copy me with your CPA and let's start a conversation.
Jake Mitchell: I mean, a conversation doesn't hurt. And at the end of the day, we're here to help you and make money, but you can also make your business run so much better while also exploiting the government, if you will.
Mike Bazar: And that's why? I say there's a lot of these times where it's just strategy and just talking to different vendors and saying, hey, we know we're buying these licenses, we know we're doing these things. How can we get the tax benefit of it this year instead of next year? Because I need the write off this year, and there's a lot of ways that we can help do those sorts of things. And your other vendors, too, not just us as a technology company, but I'm sure there's other vendors that will do it. So, I'm basically going to say, if you're doing section once a month, you should have your CPA be doing this just because you want to stay coach everything else. But Form 4562 is the form.
Mike Bazar: You can go look that up if you just want to look it, read it, get some more information on it, but with anything, it's like, I do a lot of coaching for their IT companies, and they always ask, hey, can we get your contract? And the answer is always, it's not that I care if you have my contract, but it's a legal document. Go talk to a lawyer. That's what you need to do. And this would be the same thing. We can talk about how we can pull expenses or anything else, but we always want to have a CPA involved when we talk through it to make sure that everything is kosher and above board. And you're not going to trigger audits or do other weird things. Because at the end of the day, this isn't about getting into trouble.
Mike Bazar: It's about how do we use the tax code and the things that are there and take advantage of them to our benefit and make our businesses more effective and profitable. And again, if we can save some tax dollars, let's do that.
Jake Mitchell: And I will vouch for this. If you listen to Mike, you will be in tax trouble.
Mike Bazar: That's not true. I've never been in tax trouble, but it's because I use my CPA and they're always like, but I heard this one guy on the Internet and he said, so a couple of examples of deductible technology assets, right? And we've kind of mentioned this through it, but computers, laptops, servers, tablets, smartphones, firewalls, software, like I said before, it just depends on the software, how you're buying it, and a few other things, office equipment, printer, scanners, copiers, big things like that, machinery, other equipment that you might be using in the business. This is why you hear farmers a lot of the time, at the end of the year, they're buying new trucks or they're buying a tractor or they're buying whatever.
Mike Bazar: And it's because they're trying to pull that tax burden down and buy equipment they're going to need over the next few years and they're pulling it forward into a really good production year rather than waiting and buying it. Maybe next year when they made no money and they don't need the tax write off, let's pull it forward, use it now and we can actually get a good tax benefit out of it. Vehicles again, vehicles are, every small business owner wants to have their car in the company, everything else, and I know tons of people that do it. But at the end of the day, you've got to make sure it's supposed to be used for business purposes. And if you ever get audited, you have to be able to prove that. So it depends on how the car is used and everything else.
Mike Bazar: Again, as we talk about a lot of this, like if you're just going to buy a laptop, you don't need section 179. It's an expense this year and it's just going to happen and that's it. What really plays out, it helps, is that you look at that list and go, I haven't upgraded my firewall in a few years. My servers are old. We want to migrate some stuff to the cloud. I know we need to replace a few computers. That's when it really starts to make sense where you could go find some great financing deal and other things. And as far as Section 179, you could pull more expenses this year, get a better write off. The other piece of this. And this is what always starts the conversation, is the Section 179 talk.
Mike Bazar: But if you need a couple of new computers, it's better to buy it now than it is in January, right? I mean, I guess unless you just don't have the cash. But if you had a reasonable year, I always kind of say if you're going to buy it in quarter one and you can utilize it at the end of the year, it's probably better from, with tax purposes to buy it now instead of waiting and buy it then. Now if you're going to buy it. Q. Three next year or whatever, there's a certain point where you're pulling expenses just to play with the books, and I think you can go overboard with that for sure. But I do think that there's a lot that we try to get ahead of this.
Mike Bazar: Like I said, we're talking with our customers and we're talking to them at this time of year. Hey, here's a list of five computers that need to be replaced and then what needs to be replaced now versus next year or whatever that is. Windows Eleven is a big deal in terms of there are older generation processors. 7th or 8th gen won't support Windows eleven. So, if you've got older computers, Windows ten is going to go end of life. They've stopped getting updates. That completes compliance issues and all this other stuff, security issues. So, you're going to need to upgrade to Windows eleven.
Mike Bazar: Well, if you've got a whole bunch of old computers, not only is it the Windows eleven thing, which is a driver, the people working on those computers, it sucks and it's slow and they don't like it and it's not good for employees and morale and productivity and all the other stuff. It's always a good thing to get a new computer, right? I don't know anybody that we work with, and their customers get a new computer, one of the employees, and they're like, oh.
Jake Mitchell: I'm going touch on that from a security standpoint. Right. So, I do want everybody on this call to ask yourself, how many of you have ever placed antivirus on your VoIP phone? And a lot of you have VoIP phones that are becoming more and more common. And how many of you can guarantee that your phone is separated from everything else because if it's hooked up to the Internet, it can be breached. You can get in there, right? You've got to have proper equipment to be able to do those things. And that's a common vector that people are going through right now. I'm sure that everybody on this call has heard of Columbia Pipeline. What was the vegetable? Goodness gracious. The lettuce?
Mike Bazar: I was going to say Chiquita banana. Just because Henry Shine got breached a month ago. Company. The biggest kind of on this train of thought, one of the biggest breaches besides the ransomware breach that just happened in Vegas to the MGM properties before that, one of the bigger breaches that had happened kind of historically was actually somebody used the fish tank monitoring system in a lobby aquarium to get into the network and hack the rest of it. When Target got hacked, it came from a local HVAC provider that had network access to the Target stores so they could monitor all of the heating and air conditioning equipment. And they went from that into the rest of the network. So, I think where you're kind of going with this is a lot of this stuff.
Jake Mitchell: And to go on, pull a string on the target thing, that HVAC company was 15 employees, and they took nothing from that HVAC company. All they wanted was to hop onto. So, something to think about.
Jake Mitchell: Was Dole, by the way. It was Dole. But something to think about is don't think about what you have access to. I'm sorry. Don't think about what you have in your network, because a lot of times it has nothing to do with that. In fact, island hopping is huge right now. Think about what you have access to. Right. And so, right now is the perfect time to make those adjustments to your network. If you need some help, let us know. If you've got an IT person out there that is your guy, we're happy to help them as well. We can supplement. We're not here to replace whatsoever. We're happy to supplement. But as Mike said, this is the perfect time to reconfigure, to bolster your network and to really solidify your cybersecurity posture.
Jake Mitchell: Because if you think that you don't have anything worth anything, come talk to me for 30 minutes. I'd be more than happy to sit down and show you how much your Netflix account is worth.
Mike Bazar: And I would say, too, in the chat, there's a link for the Discovery call. And if you guys want to book that, we'll even do like we do, free cybersecurity audits and other things that might show things again, trying to keep it back on the kind of tax advantages of some of this tech stuff. But there's a lot of that stuff where sometimes we get into it and we go, hey, to fix these, we need to do all this. Well, if we do that now, then you can plan for that and take tax advantages and do those sorts of things. So kind of best practices around maximizing your deductions. Right. Plan your asset purchase carefully. If possible, try to pull it in at the end of the year so you can deduct it this tax year.
Mike Bazar: And again, this is the thing you want to look at. If you grew and had a ton of revenues were good this year, profitability was good this year, it makes more sense to try to buy some of those things. If you didn't make any friggin money, then deductions aren't going to help you. So that's, again, what we say, making sure CPAs are having some of these conversations as well. And if you aren't, again, we're happy to talk with your CPA and see what makes sense, because we're not out just trying to say, hey, go buy a bunch of stuff. But if you do need to buy a bunch of stuff, why don't we do it in a way that helps the best tax advantages and benefits you that way, then that's what we're really trying to kick in with this.
Jake Mitchell: I'm going to add on to that. Even if you're not going to add something in this year, plan for Section 179 next year, and let's create a roadmap for next year. Right? It doesn't have to be end of year, right?
Mike Bazar: Yeah, it doesn't have to be the end of the year for sure. Right. You could Q two next year, buy a big thing and finance it and take the whole write off up front. It doesn't have to be a December purchase. And so, if it is one of those things where you go, hey, this year is not good, but maybe next year, great. How do we plan the project? What do we look like? How do we budget? How do we make sure we're planning that and looking for that maximum amount you can deduct is $1.16 million in 2023. So again, when they wrote this, it was farmers and machinery and manufacturers, and that's what a lot of is geared towards. But there's a lot of ways we could take advantage of it.
Mike Bazar: Even in small businesses, whether it's vehicles or bigger upgrades on networking and technology stuff or whatever it might be, those are the things that you can look at and see how can you do with that? Another key point is to keep good records. Again, one of those things before is you have to be able to prove that you made income off of it. So, make sure you just have good records of what was done, how it was implemented. Technology is pretty easy. The IRS isn't going to complain unless you buy a new gaming rig and it's at your house and you wrote it off and they're like, how are you making money off of that? And you're like, well, listen, I'm really good at Fortnite and it helps my legal practice. That's not going to fly.
Jake Mitchell: Gaming chair is awesome.
Mike Bazar: Right? But if you have a gaming computer and you sell gaming chairs, you could probably write that off, right? It depends on your business anyway, so make sure you just have good records. You know what you're using it for, how you're using that in the business, those sorts of things. So that if you do ever have an audit again, you can justify that expense. And again, that's why you want your CPA involved, because they're going to question it. And it's really easy for us to want to sell technology and for you to want to buy stuff that you think is cool and great. But if a CPA goes, how are you going to use it in the business? And you can't justify it. They're going to go, hey, that's an audit flag. You don't want to do that.
Mike Bazar: And again, we want to make sure all these things are good for you, good for the business. That's what we're really shooting for here.
Jake Mitchell: And I'll also add on to that, if you don't have a quality CPA, let us know, because across the country we've got tons of CPAs that are phenomenal. And we're not going to refer you to the worst, I promise. We'll refer you to the best. We've got them in basically, what, 26 states at this point. So, if you need some help, don't be afraid to ask. We're happy to help you out, especially with a CPA that knows about this specific topic. We've got tons of them out there come to us. We're happy to help out.
Mike Bazar: Yeah, for sure. So just kind of a couple of recaps. And again, if you guys have questions or anything else, please chuck them in the chat and everything, but it's got to be purchased or financed with a qualifying lease or loan. Again, the reason why I say that is if you pay for the whole thing this year, you already get the expense. You don't need a Section 179 write off. So, this usually ends up being the thing where, again, vehicles, because people's head just gets that easy. You buy a car today, you're paying for it over the next five years, but you get to take that entire asset and write it off now. Now just because I know this, with vehicles, there's some limits, right? 6000 pounds, you can write it all off this year.
Mike Bazar: If it's not 6000 pounds, then I think you can do like 50% or something. But again, CPAs know all those rules and some of those changed because everybody went and abused it. They all started buying fancy cars and going, it's a company write off over 6000 pounds. You're basically buying a truck. And the assumption is if you're buying a truck, you're going to use it for business, those sorts of things. So, it's got to be used in the taxpayer's business for income producing activities. So again, you buy a gaming rig or a car for your wife and you try to write it off. That can be an auditable thing where they're going to come back and say that's not going to fly. It has to have a quantifiable and useful life.
Mike Bazar: So again, if it's really short, I think that year was the minimum that it's got to have at least a year of life. It's got to be quantifiable, and it's got to be placed in service this year. So again, computers, we can get them on site, those are going in service, that kind of thing. We can do those projects quickly, a lot of the time, and make sure that the invoice and some of the work is reflecting that. So, you can get the write offs even if it's an ongoing project. Hey, it was placed in service. It just wasn't fully operational for another X days or whatever it is. But as long as it's actually in service, it meets that requirement for the year for Section 179. So again, just limits on it, right. 2023, 1.16 million.
Mike Bazar: However, if the business total qualified property purchases, I say 2.8, then it's reduced over that. What I would say off that slide is basically talk to your CPA if you're buying a lot of stuff. So if you know you're getting over a million dollars' worth of equipment or other things, your CPA should definitely be involved anyways because plan that properly and make sure those things are good. Do you want to buy a million dollars' worth of computers? We will figure that out.
Jake Mitchell: Yeah. If you're buying a million dollars' worth of anything, come talk to me, please.
Mike Bazar: I don't know, again, if you guys have questions and things you want to talk about and then I'm going to skip off of this and just leave this up so you guys have it as well as we have a new kind of CPA and accounting firm referral program. So, one of the things we've been telling people is, obviously, we'd love to talk with your CPAs and help your business in that. But the other piece of a lot of this, and this is security and other things, is your CPAs have access to all your books. And so we really want to make sure CPAs are secure. It's one of those things we're really focusing on the last little bit. They also have some new compliance guidelines from the FTC.
Mike Bazar: So, if you have a CPA and you have no idea what their it or their cybersecurity or other things are, we'd love for you to refer them over. We've got a little bonus there that we throw your, know, if they sign up to be a client or whatever. So anyways, we just really want to how do we secure more companies? How do we make sure they're protected? CPAs are a big target because they have a lot of financial and personal information. And so, we've kind of struck out to try to help as many of them be secure as possible. And then, like I say, that impacts you and your business because your CPA has access to all your information. So, if your CPA is not secure, that can actually be not great for you.
Mike Bazar: And again, there's the link in the chat and then the last one here, Info@vectorChoice.com. There's our phone number. There's also that QR code. It's also in the chat is a link. If you want to book a discovery call. Again, that could be anything, right? Hey, do I need to catch up on projects? I don't have a lot of good technology. What do we need to do? I have all these ideas. Whatever it might be, we're happy to just to try to talk through that, see what it might look like. And if nothing else, even if it isn't a thing for this year, maybe at least you kind of get some quotes and some ideas and you can start planning for the future, whatever that is. The point being, we want to help as much as we can and keep you better prepared.
Mike Bazar: And a lot of the time, you just need to talk to somebody who's an expert in that field that can help you figure it out. Yeah. With that, I don't think we have any questions. I don't think you have anything else to.
Jake Mitchell: I would encourage you to explore the idea. Right. If you don't have anybody to talk to, come talk to us. We will facilitate conversations. We'll help you out, we'll guide you through the conversation. Mike and I are very good at making connections and facilitating know. Don't be afraid to just say, we're not going to charge you yet. No, we're not going to charge you at all. We will actually get you in touch with a qualified CPA. We can give you an estimate on what type of equipment you need. If you need any sort of audit, we're happy to do that. If you need any sort of cybersecurity assessment, happy to do that. Free all of these things, we want to help.
Mike Bazar: Hopefully.
Jake Mitchell: You'll need us at some point, but at the end of the day, we're not used car salesmen, so we are happy to give you the information that you need, and then however you deal with that, it's up to you, and we're here to help.
Mike Bazar: And one of the things we are trying to do internally to help customers and anybody out there is we can go usually at the end of the year, companies like Dell, HP, Cisco, all these guys for network, they want to make a deal because they're trying to hit certain numbers and other things. So, they will give us way better deals. And if we can bring bigger quantities, we will get even bigger deals. So even part of this, as we say it, if we get several people that are interested, what we may do is go back to them and say, hey, we've got 30 customers that all want a few computers each. So, I'm going to go to Dell and I'm going to say, hey, I want to buy 100 computers, and I'm going to go push them for a really good deal.
Mike Bazar: And then we're going to sell three here, three here. But I need to know that you want to be in on that kind of thing, because I don't want to buy 100 computers for no good reason. Right. But that's why I say there's a lot of these things where we can go end of year, end of quarter even. And if we know that there's this stuff coming, this is why we like to plan it and kind of know what people's budgets and other things are, because we can go a lot of the time, get a way better deal on equipment, whatever that is.
Mike Bazar: If we go in and say, hey, look, we need to buy a couple of servers and 100 desktops and this and of that, and if we go to them with this big bucket of potential initial dollars, they'll give us a really great deal on that. We might be able to get 10% or 20% off on something just because we're buying huge quantity. And so again, if it's something where you've thought about, hey, it's end of year and we're thinking about it's just another good thing. So, we know we can see how big a bucket we can create essentially, right? There's a big difference between saying we want to buy 20 computers and we want to buy 100 computers, and we just need to know who wants to buy what.
Mike Bazar: And as we have those conversations, then we can go make better deals around that. So, with that, I don't have anything else. Like I said, shoot us an email, give us a call, scan the QR code. You can book a ten-minute call there and see our calendars and find a time that works for you. So, whatever is easiest, we're happy to do that. And then, like I said, refer your CPA if you want. We've got that form in the chat, or just give us a holler if you have any questions and we're happy to help.