It's that time of year again: Businesses and individuals alike are gathering their financial information to complete their federal and state taxes. Companies assess their bottom line and squeeze as much value as they can out of each of their assets.
Everyone loves a large refund check, and corporations use this money to invest back in their mission-critical initiatives. These dollars can sometimes mean the difference between starting out the financial year on the right foot, and having to work extra hard to ensure essential projects have monetary backing.
When it's time to file taxes, the best refunds and write-offs often come from surprising places. Case in point: your company's technology. From Internet connectivity to mobile devices, tech systems can represent a boon for your business's tax filings. In the spirit of the season, let's take a look at a few places where your enterprise can save money, and where it can create its own wealth.
Deductions gleaned from efficient office spaces
When one thinks of technology, we often conjure thoughts of electronics that fill a building, not the building itself. However, structures are often the backbone for technological infrastructure, and if your company has put in the effort to create an energy-efficient and economical brick-and-mortar space, tax season could be the time when this pays off.
Energy-efficient commercial buildings fall under section 179D of the 2005 Energy Policy Act, and businesses could qualify for $1.80 per square foot in deductions if their space meets the parameters. Eligible buildings must have been constructed or retrofitted after 2005, and the organization must submit to a third-party energy tax study. Subsystem deductions in this category include HVAC configurations, interior lighting and the building envelope, each of which provides a $0.60 deduction per square foot. When you consider the amount of space your enterprise might have, the building itself could be a deduction gold mine.
Saving where it counts: Mobile devices, software and Internet
These days, one would be hard-pressed to find a company that doesn't use the Internet, computers, business applications or other gadgets for some aspect of their business. TurboTax pointed out that these systems could play a major role in an enterprise's tax deductions.
"Your computer, cellphone, Internet service, software and even some cool tech gadgetry are possible tax deductions if you must use them to run your business," TurboTax noted.
Michael Carney, MWC Accounting owner and president, told TurboTax that when administrators and accountants take depreciation and percentage of time that devices are used for work into the equation, companies have a choice as to how they structure their deductions.
"You can depreciate them, spreading the deduction over the number of years the IRS considers to be the shelf-life for this item, or you can write the entire cost off for the year of purchase," Carney explained. "Your choice between the two depends on your projected income and other expenses going forward."
The main requirement, according to the IRS, is that tech items and systems qualify as "a usual, necessary, customary and reasonable expense for your type of work." As long as the gadgets, software and Internet connectivity utilized in your organization fit this bill, you could qualify for considerable deductions.
Community-specific tax deals
Sometimes, businesses can strike up deals with their community governments for tax breaks based on their contribution to the area. For example, last year five technology firms received tax incentive extensions due to their location and efforts in an emerging tech marketplace within San Francisco.
Twitter was among the organizations to benefit from the tax break, and the community utilized the incentives in the hopes of better supporting its technology industry. In order to qualify, the companies offered up volunteer hours, monetary support for local nonprofits and specialized purchase thresholds for other businesses in the area.
When it comes to tax season, it's all about knowing where to look to ensure your company gets all the deductions and refunds that it deserves.