If you’ve been on the fence about purchasing new digital equipment for your practice, this tax incentive might be all the justification you need to make the decision.
Section 179 of the IRS tax code is designed to support small businesses by giving them financial incentive to invest in their business and support the manufacturing sector that serves them. It is also intended to spur economic growth. With Section 179, business owners can deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. For 2016, that means up to $500,000, which is a large increase over previous years and can really make a difference to your bottom line.
While panoramic imaging systems, CBCT, intraoral sensors and CAD/CAM technology all pay for themselves, thanks to improved communication and case acceptance, buying your equipment before the end of 2016 can provide additional financial benefits.*
IMPORTANT: Just remember that the equipment and software must be financed and in place by midnight December 31, 2016. Use Form 4562 to claim your deduction.
In addition, if your purchases exceed the limits for Section 179, you can depreciate 50 percent of the cost of eligible equipment acquired and put in service during 2015, 2016 and 2017 in the first year. After that, bonus depreciation is scheduled to phase down to 40 percent in 2018 and 30 percent in 2019.
For more information about Section 179, Consult IRS Publication 946 or follow this link: https://www.irs.gov/publications/p946/ch02.html.