2021 IT Spending Trends — What Should You Know For Your 2022 Budget?
2022 is coming up fast – have you started planning your technology for the new year? The sooner you get started on it, the more effective it will be.
Over the past few weeks, we have explored IT spending trends that developed over the course of 2021. On the whole, companies are investing in the cloud more than anything else and seeing greater ROI.
Has that been your experience?
If your IT budget isn’t going as far as you’d like, then you need to start planning it sooner rather than later. By understanding the value IT offers, you can learn how to better spend your IT budget.
IT planning is a key oversight in today’s business world…
Businesses Are Bad At Technology Planning
Despite the fact that 93% of surveyed businesses recognize that IT is strategically and operationally critical (Wakefield Research), very few are doing anything to properly plan their IT:
- 66% find that the amount they’re budgeting towards IT isn’t enough to keep up with what they need from it.
- 77% of those with less than 100 employees have found that their investments in IT are too limited
- A third of those surveyed said that less than 10% of their strategic planning was about IT
What Should Your 2022 Technology Goals Be?
If developed effectively, your 2022 Technology Plan should achieve the following for you
- Unite your business plan, marketing strategies and sales targets.
- Identify areas of inefficiency in daily business processes that can be supported by the right IT.
- Help you budget accurately for your IT expenses, including new technology purchases as well as support.
Don’t Put Off Your IT Budget
With IT shifting from just another piece of equipment in the office to the core of operations and a key aspect of how you defend your business, you should designate it as a central part of your budget.
This also means that you must assess and clearly define how IT aligns with your business objectives to decide what you’ll need for the coming year(s).
Proper IT budgeting will help you lay a foundation for success for the future. Using the right IT solutions can help you:
- Accelerate your business growth
- Increase your operational effectiveness
- Ensure optimal productivity from your employees
- Overcome operational challenges
- Increase collaboration and communication
- And, most importantly, stay protected!
Plan Ahead And Reduce Your Taxes
Do you know what Section 179 has to say about your upcoming budgeting process? There are considerable opportunities to write off property taxes and save money in your next budget – but only if you know how Section 179 works.
Let’s start with an overview of how Section 179 helps businesses, which comes down to two points:
- It provides the opportunity to invest in the solution or solutions that your business needs
- It reduces taxable income, freeing up finances to address other needs
As per the IRS Code, Section 179 allows, “A business to elect to recover all or part of the cost of certain qualifying property, up to a limit, but fully deducting it in the year you place the property in service”.
The potential deduction generally comes down to the cost of the qualifying property, while still subject to a dollar limit and business income limit. In 2021, the total amount cannot be more than $1,050,000 (and you do not have to claim the full amount).
As to what property qualifies, eligible technology includes software and hardware (both specialized and generic), and even office furniture; however, all deductible items must meet the following requirements:
- Must be eligible property: Including machinery and equipment, property contained in and attached to the building (refrigerators, office equipment, signs, etc.), gasoline storage tanks and pumps, livestock, off-the-shelf computer software, and qualified leasehold improvement property
- Must be acquired for business use: This is property acquired for use in the specific trade or business that your company deals in, as opposed to property that is solely for the production of income (such as investment or rental property). Furthermore, property used for both business and non-business purposes is deductible if used more than 50% for business —the deductible amount is the cost multiplied by the percentage of business use. (Note: if business use drops below 50%, you may have to recapture the deduction).
- Must have been purchased: This omits any property acquired as a gift, or by one component member of a controlled group from another component member of the same group (e.g. sale of a product from one division of the business to another); or from a related person (family, spouse, ancestors, etc.).
- Must not be described under What Property Does Not Qualify:
- Land and land improvements
- Property you lease to others
- Property used to furnish lodgings
- Property used primarily outside of the US
- Leased property
Advantage Technologies Will Help You Plan For 2022
IT budget planning doesn’t have to be a frustrating process. Our team will develop a strategic plan specifically for your company to make sure you’re investing in the right solutions to truly help you meet your overall objectives and exceed your goals, in order to reach new heights within your business.
Effective IT planning should result in a wide range of benefits for any operation in any industry. Benefits include:
- Increased productivity
- Minimized downtime and disruptions
- Increased and customized security measures
- Enhanced time management
- More effective communication
- The best possible return on your IT investments
Keep in mind, IT strategy isn’t a one-time thing. We can work alongside your team to provide ongoing guidance, support, and services.
Get in touch with our team to get started on your 2022 technology budget.