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The Windows XP Fallout and Buying Technology

More than Windows XP support will disappear after April 8, 2014. Support for Windows Server 2003 and Windows Office 2003 will cease. If you happen to depend on all three, we strongly recommend you begin your exit strategy if you haven’t done so already. And if these aren’t reason enough to upgrade, you may also be eligible for tax breaks on your new technology. Here are a few pointers to get you started or farther along on your 2014 planning.

First and foremost, don’t count on Microsoft not sticking to its guns on stopping support for XP and the 2003 products. As one industry commentator pointed out, the company gave its customers and their support organizations warnings for the last four years. If you haven’t planned your transition, you have only yourself to blame.

Section 179

If you have been dutifully budgeting for your transition from XP and the 2003’s, you should be planning now to buy desktop and laptop computers capable of running 64-bit versions of Windows 7. If Microsoft XP going away is not a strong enough stick to motivate you to buy, the Federal Government has a carrot: Section 179 of the Tax Code.

Section 179 lets you claim a full deduction of the price you pay for new and used computer hardware and off-the-shelf software purchased or leased and put in service between Jan. 1, and Dec. 31, 2013. Off-the-shelf software is software available for purchase by the general public – not custom-written. The value of all qualified purchases and leases is limited to $500,000, and you must use them for business at least 50% of the time.

If you will not make a profit in 2013 and will not pay taxes (this is separate from not filing a tax return), you can carry forward a 50% deduction to a year when you will have a profit and pay taxes.

You should check with your tax advisor to make sure you apply the provisions of Section 179 correctly. In fact, your tax advisor could find more benefits for you.

What to Buy

Computers with Windows 7 operating systems are still available, and we can help you with selecting them and buying them. Windows 7 computers are not readily available in retail stores or from many online vendors. As the time draws near for Microsoft to pull the plug on old technology, supplies will get tighter.

As we’ve talked to people about the upgrade, we’ve been asked about other operating systems, such as Mac and Linux. We don’t expect Linux to be a big player in the consumer or small-business markets. Part of the reason is that most users will find it different from what they’re used to and that there won’t be as many people able to service Linux computers.

Macs, on the other hand, can be a viable alternative. You can run PC programs on Mac systems, and you can use Macs or PCs if you access programs and data files through cloud computing. Another advantage is that Macs are sold through retailers, including both Apple stores and dealers. If you have a computer crash, you can buy a new one, bring it back to the office or your home and start setting it up in a matter of hours. We sometimes wonder if Dell and other major suppliers to business missed the boat by not having a strong retail presence.

In addition to new computers, you should replace your Windows 2003 servers and your Windows Office 2003 software. As with XP, the lack of Microsoft support will make them more vulnerable to attacks from hackers, and your operating efficiency will drop drastically. Attacks and inefficiencies could well cost you much more money than replacing those systems now.

Don’t Forget Your Router

And while we’re on the subject of upgrades, you should also take a look at your router. Verizon, for example, is offering a router – called a gateway – for FIOS® services and technology. While the fiber optic technology is blazing fast, the gateway is more like a gate. If you want or need faster Wi-Fi and/or a stronger network to run multiple computers and devices, including large-screen, high-definition TVs, you’ll want a better consumer-grade product.

A consumer-grade product is better even if you have standard cable for TV, Internet and phone. You will get better network performance with a better router than the gateway your provider supplies.

In both cases, you will still need the provider’s equipment. However, we can set up a bridge to send the Wi-Fi signal to your router.

We can help you select the best routers and Wi-Fi equipment for your office and home-office needs and make sure they are set up to give you all the benefits of your service. Getting a new router makes sense every few years because the components can wear out during the temperature swings that come from normal use.

Put Section 179 of the Tax Code to work for you. Call us – 973-433-6676 – or send us an email to talk about technology purchases that Uncle Sam can help you make.

This article was published in Technology Update, the monthly newsletter from Sterling Rose LLC.