You’ve probably heard of the section 179 deduction, if not you should think about getting a new CPA. We’re just kidding, but not really. Section 179 of IRS tax code allows for dentists to deduct the full purchase price of qualifying equipment. This equipment can be purchased or financed during the tax year. Which means, you can actually deduct the FULL purchase price from your gross income. The deadline to make this claim is December 31st. The catch? You must have purchased, or financed, the equipment and it must be installed before that date. The problem? With the holidays and everyone trying to take advantage of this opportunity, you don’t want to wait till the last minute.
The deduction gets even better with PATH…
The PATH Act was recently passed in 2015. It stands for, “Protecting Americans from Tax Hikes Act of 2015.” The act actually increased the investment limit from $25,000 to $500,000. It also increased the phase out limit from $200,000 to $2M. Both limits are indexed for inflation, great news! Any excess investment over the initial investment limit would be considered as “phase out.” Which means total dollar investments can be made up until the investment phase out limit, the first $500,000 can be deducted during that calendar year and the remaining investment (up until the phase out limit of $2M) can be depreciated over 5 to 7 years. Great news right? You should call your tax accountant.
If you’re thinking about investing in new dental equipment and technology, there has literally never been a better time. Remember to always consult your certified tax accountant before making any investment decisions, but now has never been a better time. If you’ve been thinking about investing in CBCT and upgrading your dental imaging technology, talk to your tax accountant and then give us a call. We’ve got some amazing year end promotions we’re keeping under wraps.
Don’t wait too long though, everyone wants to get their equipment scheduled for installation before December hits. Beat the madness and stay ahead of the curve! We’re here waiting to talk to you.
Always Consult With a Licensed Accountant in Your State
Some states (such as Minnesota) allow for Section 179 deduction amounts and depreciation schedules that are different from the Federal Section 179 allowance. For this reason, it is always important to discuss any large equipment investment with your CPA in order to avoid surprises when tax season comes around.