IRS Section 179 Tax Deduction
Significant tax savings on equipment and technology investments
Designed to encourage business owners to invest in equipment or technology, the IRS Section 179 tax deduction can result in significant savings for your dental business. And now, the deduction has been extended permanently, until further notice, allowing you to deduct up to $500,000 in qualifying expenses annually during the first year of ownership. Ready for your next investment?
Section 179 Calculator
Curious how this offer might help your specific equipment purchase? Plug in your purchase price to see just how the tax code will benefit you.
The calculator presents a potential tax scenario based on typical assumptions that may not apply to your business. This page and calculator are not tax advice. The indicated tax treatment applies only to transactions deemed to reflect a purchase of the equipment or a capitalized lease purchase transaction. Please consult your tax advisor to determine the tax ramifications of acquiring equipment or software for your business.
How It Works
It's quite simple. The tax code indicates a new dental chair should last five years. As such, you can deduct one-fifth of the cost annually on your return until the cost has been fully depreciated. Easy enough. But that's not all...
The same tax code allows for a full deduction in the current year within code Section 179. For example, if you purchased $300,000 in equipment and placed it into service in a single year, you would take the full deduction ($300,000) immediately.
Any dental practices that purchase, finance or lease less than $2 million in new or used equipment for their business during the previous tax year should qualify for the Section 179 deduction.
Bonus depreciation is a deduction that is allowed on equipment that has not been recognized under Section 179 — any amount over $500,000 and below the $2 million threshold. How much can be deducted? Half of the cost to acquire.
Explore Your Options
The Section 179 Tax Deduction isn’t the only reason to buy equipment and technology from Patterson. We also help you finance, install, onboard and make use of your technology better than anyone else. No matter how you choose to invest in technology, Patterson’s comprehensive services and support allow you to invest with confidence.
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PRACTICE MANAGEMENT SOFTWARE
Experience better integration and better reporting backed by expert support through our practice management solutions.
Three Golden Rules of Section 179
According to Trent Watrous, a dental-specific CPA in Nashville, TN, there are three golden rules to keep in mind when considering the IRS Section 179 Tax Deduction.
The deduction is allowed only in the year that the asset is “placed into service.” This means the year in which the equipment is ready for use, not the year in which the equipment is purchased.
Section 179 applies to personal property, such as equipment and technology, and potentially leasehold improvements. Nothing further.
The deduction is limited to $500,000 of equipment purchases in a single year. Equipment that qualifies for the deduction but exceeds $500,000 can be depreciated across future tax years. The deduction isn’t lost; it’s simply delayed.