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Put Section 179 To Work For You

KaVo Kerr Connections

KaVo Kerr Team

Put Section 179 To Work For You

Growing a dental practice requires maximizing patient satisfaction, maintaining a skilled staff, and improving accessibility to services. Investing in new equipment is also a major component to growth as it plays a pivotal role in influencing a patient’s decision to return and refer additional business.

While the decision to acquire new equipment can create a sense of financial anxiety, Section 179 provides additional tax advantages that can relieve your financial burden and enable you to accomplish your practice goals.

What is Section 179?:

Section 179 of the IRS tax code allows business owners to write off the full purchase price of qualifying equipment and software purchased or financed and put into service during the tax year. It is designed to incentivize business owners to invest in equipment and technology now opposed to delaying improvement opportunities.

What is the Benefit?

Instead of deducting qualifying equipment or software over a set depreciation schedule (typically five to seven years for qualifying equipment), Section 179 allows businesses to deduct the full purchase price during the first tax year. This change in the depreciation schedule makes a big difference to your bottom line as you can deduct the full purchase price of your equipment from your gross income.

 2018 Section 179 Highlights:

  • Deduction Limit: $1,000,000

  • Spending Cap Limits: $2,500,000                                                                                                                                                                                   * This is the maximum amount that can be spent on equipment before the Section 179 Deduction available to you begins to be phase out on a dollar for dollar basis

  • Bonus Depreciation: 100%                                                                                                                                                                                             *The deduction that is allowed on equipment that has not been recognized under Section 179

 

 Example:

  • Equipment Cost: $100,000

  • Cash Savings: $35,000

  • Equipment Cost After Savings: $65,000                                                                                                                                                                         *Assuming a 35% tax bracket

 
Disclaimer: This article is not intended as tax advice, please consult your tax advisor to determine the tax ramifications of acquiring equipment or software for your business. Your advisor may know of other advantageous provisions of Section 179 that could apply to your situation. 
- PC00090
Section 179 Infographic
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