• Best Practices New Normal
  • Digital Dentistry
  • Data Security
  • Implants
  • Catapult Education
  • COVID-19
  • Digital Imaging
  • Laser Dentistry
  • Restorative Dentistry
  • Cosmetic Dentistry
  • Periodontics
  • Oral Care
  • Evaluating Dental Materials
  • Cement and Adhesives
  • Equipment & Supplies
  • Ergonomics
  • Products
  • Dentures
  • Infection Control
  • Orthodontics
  • Technology
  • Techniques
  • Materials
  • Emerging Research
  • Pediatric Dentistry
  • Endodontics
  • Oral-Systemic Health

Here's How the Section 179 Tax Deduction Will Benefit Your Practice


If you’ve upgraded your practice this year, the Section 179 Tax Deduction will help boost your bottom line and allow you to move with confidence into the new year.

tax section 179 deduction equipment purchase

When you start to look at how much you're paying just in taxes, it can certainly be disheartening. However, the benefits of the Section 179 tax deduction will help alleviate some tax headaches.

The end of 2018 is in sight and 2019 is beginning to peek over the horizon, but along with the new year also comes a new set of expenses to go through in order to properly file your taxes. Your personal taxes are probably a big enough headache but managing your practice’s taxes doesn’t have to be a slog too.

If you’ve already made any upgrades or expansions to your office, or are planning to make any before the end of the year, you could be entitled to a significant tax break under the Section 179 deduction. Here’s how it works.

Section 179 at a glance

In December 2017, the Tax Cuts and Jobs Act was signed into law, allowing small business owners to take an increased deduction for upgrades made to their office. This includes your dental practice, and it allows you to deduct up to one million dollars on the equipment you purchased within the calendar year.

Section 179 is designed as an incentive for you to invest in your practice and grow your business. For all of the qualifying equipment you buy or lease, you get to deduct the full purchase price from your gross income. If you elect to take Section 179, the full price of your equipment will be taken up front and not written off over time, like most practices do for their equipment.

Section 179 can also be taken on each individual item and not all of your equipment in one calendar year, unless you elect to fill out the form for each piece of equipment. On the other hand, you don’t have to use it at all. It’s up to you — you get to pick and choose the items to apply it to that make the most sense for your financial plan.

Qualifying equipment

A tax deduction for new equipment is useless if the equipment you purchased doesn’t even qualify. Fortunately, the list of qualifying equipment under Section 179 is very broad and doesn’t require you to jump through many hoops.

Some items include computers, office furniture, improvements to your building like alarms and security systems, equipment for business use, and basic software like Microsoft Office applications.

What you could gain

The Section 179 deduction does have one major caveat, and that is you can only spend a maximum of $2.5 million on equipment purchases before the deduction is reduced. However, this is a wide cap for most small practices, and up to this amount you will still be able to deduct the price of your equipment purchase in full.

For instance, a $35,000-dollar equipment purchase will lead to a true cost of $22,750 dollars after tax. That’s a total of $12,250 savings on your purchase.

If all those cash incentives weren’t enough to gain your interest, then consider this: Section 179’s benefits are only guaranteed for 2018, so don’t wait till next year to elect to take it — it might not be around.

Related Articles

  • Asset Location, Strategy to Cut Taxes, Is Often Overlooked
  • Small Changes Can Improve Practice Profit Margins
Related Videos
Mastermind – Episode 35 – Finding Strength in Our Differences
The Uptime Health Story: An Interview with Uptime Health CEO and Co-Founder Jinesh Patel
Mastermind – Episode 34: Proactive Dentistry, Diagnostics, and Early Detection
2024 Dental Products Report Spring Selection Bracket Reveal Video
Process of Care Workflow and Repairing Early Caries with Guided Enamel Remineralization
Addressing Unmet Needs in Early Childhood Oral Care - an interview with Ashlet Lerman, DDS
Mastermind Episode 33 – Charting the Course for the Future of Dentistry
CDS 2024 Midwinter Meeting – Interview with Debbie Zafiropoulos, who discusses a trio of new infection control products from Armis Biopharma.
2024 Chicago Dental Society Midwinter Meeting – Interview with Peter Maroon, business development and sales lead at Spectrum Solutions® on the new salivary diagnostic test, SimplyPERIO.
CDS 2024: Ivoclar's e.max ZirCAD Prime Blocks with Shashi Singhal, BDS, MS
© 2024 MJH Life Sciences

All rights reserved.