COMMERCIAL SECURITY SYSTEMS
As a small business owner in Orlando or Central Florida, you wear many hats – manager, accountant, salesperson… and maybe even security expert. Keeping your business safe and secure is essential, but implementing the right measures can also be expensive. A robust business security system isn’t just about safeguarding your assets and ensuring workplace safety; it might also offer financial advantages like tax deductions and potential insurance savings. So, if you are wondering if security monitoring is deductible for a small business, please continue reading to learn more about the financial benefits it can bring to your business.
Tax Deductions for Security Monitoring: The Basics
The Internal Revenue Service (IRS) generally considers expenses related to business security monitoring as necessary and ordinary business costs, making them potentially deductible. For an expense to be deductible, it must be both “ordinary” (common and accepted in your industry) and “necessary” (helpful and appropriate for your business). Here are the types of security-related expenses that might be deductible:
- Security Equipment and Installation: The cost of purchasing and professionally installing security cameras, alarms, sensors, and any related hardware can be deducted. This also includes expenses for improvements that enhance the functionality or longevity of the security system.
- Security Monitoring Fees: Subscription costs for a security company’s professional monitoring service, whether paid monthly or annually, are generally deductible as operational business expenses.
- Security Maintenance and Repairs: Costs for ongoing maintenance, repairs, or upgrades to your security system are deductible in the year they are incurred, provided they are ordinary, necessary, and directly related to maintaining the security system.
The Tax Cuts and Jobs Act (TCJA) and Your Deductions
The TCJA has introduced provisions that benefit small businesses claiming tax deductions for security systems:
- Increased Section 179 Deduction: This change allows businesses to immediately deduct a larger portion of the cost of new security equipment on their taxes. However, it’s important to note that there is a limit to the total amount that can be deducted under Section 179, which can change annually. For 2024, businesses should verify the maximum deduction amount to understand how it may affect their security system investments.
- Bonus Depreciation: The TCJA temporarily expanded bonus depreciation, allowing businesses to deduct a substantial percentage of the security system’s cost in the first year it’s placed in service. Although the 100% bonus depreciation rate has expired, for 2024, the rate is 60%. This allows for a significant deduction in the first year, accelerating depreciation compared to spreading it over multiple years. The bonus depreciation is set to decrease by 20% each year until it’s completely phased out in 2027, so staying current with the depreciation rates and rules is crucial.
Orlando Business Security Systems: Tax Deductions, Insurance Savings & More
Implementing a business security system is not only about safeguarding your assets but also about unlocking potential financial benefits. To maximize these advantages, consider the following key factors:
- Business Purpose: To qualify for tax deductions, your security system must serve a primary business purpose. Document the specific business-related reasons for installing the system, such as deterring theft, ensuring employee safety, or protecting valuable equipment.
- Insurance Benefits: Many insurance companies offer discounts or reduced premiums for businesses that implement security systems, recognizing the decreased risk of theft and damage. Check with your insurance provider to understand the potential savings and requirements.
- Home-Based Businesses: For businesses operating from home, the deductible expenses for security systems may be limited to the portion of the system that serves the dedicated business area. The deductible amount typically correlates with the percentage of your home used for business purposes.
- Seek Professional Guidance: To ensure you are maximizing your security monitoring deductions for your small business while remaining compliant with tax laws, please consult with a tax advisor. Additionally, familiarize yourself with IRS resources, such as IRS Publication 535 – Business Expenses, and the IRS website sections on depreciation and Section 179 deductions, to understand the nuances of claiming these expenses.
Documentation and Compliance for Security Monitoring Deductions for Small Businesses
Maintaining detailed records of all security-related expenses is vital for substantiating deductions. Businesses should consult with a tax professional to ensure compliance with the latest tax laws and to maximize their deductions.
SECURITY SYSTEM COMPANY
Implementing a security system for your Orlando or Central Florida business is not only a smart investment in safeguarding assets; it might also offer financial benefits through security monitoring deductions and potential insurance savings. At Palmer Electric, we’re committed to providing the security solutions your business needs for ultimate protection. For over 70 years of experience serving Central Florida businesses, we’ll design the perfect system customized to your specifications. Contact us online at or call 407-646-8700 to schedule your consultation and let us help you achieve peace of mind with best-in-class business security monitoring solutions.
Disclaimer: This article is not a substitute for professional advice. The information presented is for informational purposes only and should not be construed as tax, accounting, or legal advice. Laws and regulations are complex and subject to change. Before making any decisions pertaining to security system deductions, it’s essential to consult with a qualified tax advisor or legal professional to discuss your unique circumstances.
