Tax Benefits
Take advantage of any tax deductions that apply when purchasing new or used equipment. We recommend you talk with your financial or tax advisor to make sure you’re maximizing those opportunities.
Section 179
Section 179 of the Internal Revenue Code is meant to help you improve your practice by adding new or used equipment. The tax savings help you offset payments if you choose to finance.
Under Section 179, your practice could deduct up to $500,000 for any qualifying equipment purchases, even if it's 100% financed.
How Section 179 Could Work for You
Let's say you're expanding your practice and negotiate great prices on a new table and X-ray machine. The total cost is $25,000. Under Section 179 rules, you may be able to deduct the full equipment cost in the year you put the equipment to use.
If you're in the 35% tax bracket, your tax savings could be $8,750. The amount you save in taxes could exceed the amount of loan payments made the entire first year.
| Equipment Cost: |
$25,000 |
| Section 179 Deduction |
$25,000 |
| Tax Savings (35% tax bracket) |
$8,750 |
Learn more about Section 179 in this episode of our Chiropractical podcast.
Section 44, ADA Tax Credit
Section 44 of the tax code is designed to help businesses comply with the Americans with Disabilities Act (ADA). When you purchase certain adaptive equipment, you could receive a credit of up to 50% of your purchase up to $10,250. The maximum credit is $5,000.
This credit may be available to you if:
- Your total revenue in the previous tax year was $1,000,000 or less; or
- You have 30 or fewer full-time employees
Longevity of Tax Benefits
Congress rules on budgets and taxes at different times, so we don’t know how long current business deductions will remain in effect. Now may be a good time to expand or grow your practice and take advantage of possible tax savings.