When it comes to being a doctor and owning your own business, it can often seem performing a root canal or placing an implant is less complex than balancing the books and navigating tax code.* However, with the right insight, you’ll find certain tax advantages designed for small business owners like yourself. For example, when you’re looking to add new technology to your practice, these advantages can make it more cost effective and beneficial to your bottom line to install new hardware and software. In fact, that’s the whole purpose of Section 179: A form of tax relief designed to spur economic growth by giving small business owners, like dentists, financial incentive to invest in their businesses.
How does Section 179 benefit my practice…and my bottom line?
Prior to Section 179, businesses wrote off large purchases a small portion at a time through depreciation each year. However, now practices can write off the full purchase price of qualifying equipment and/or software purchased or financed during the tax year from their gross income—up to $1,160,000 in 2023. You can calculate how much Section 179 could save you with this convenient calculator: 2023 Section 179 Tax Deduction Calculator. As a result, it can help dentists save a substantial amount of money on their tax bills and improve their practice’s overall financial health.
What can Section 179 be applied toward?
When it’s time to grow and modernize your practices with new technology, Section 179 can give you a much-needed tax advantage. Specifically, Section 179 can be applied toward “capital equipment;” in the case of a doctor, equipment used to provide a service—like a CBCT system.
When can I take advantage of Section 179?
Manufacturer’s may have led you to believe that Section 179 comes into effect late in the year. Who hasn’t seen a “Take Advantage of Section 179 Before It’s Too Late!” email in December, along with all the other end-of-year savings? This may stem from the fact that to qualify for the Section 179 the equipment must be installed during the tax year you wish to claim the deduction. The key word is during the year. So, if you’re considering a large equipment purchase there’s no need to hold out until the end of the year to benefit from Section 179; in fact, installing the equipment late in the year may be cutting it to close to the deadline to qualify.
For dentists looking to invest in advanced dental technology, update their business infrastructure or expand their practice, Section 179 can be a gamechanger. It allows them to make necessary investments without the burden of waiting for depreciation deductions to kick in slowly. This immediate tax relief can free up capital that can be reinvested into the practice, leading to improved patient care, increased efficiency and potentially higher revenue.
*This blog is for general informational purposes only. You should not rely on information contained in this blog to make any legal, tax, investment, financial or other decisions. Readers of this blog should contact their financial advisors, accountant, attorney or other relevant professional to obtain advice with respect to any particular legal, tax, investment, or other issue. No reader, user or browser of this blog should act or refrain from acting on the basis of information in this blog without first seeking appropriate professional advice.