Dental Financing Insights

Section 179 Update

Section 179 Update

1/1/2017

Recent legislation extended many tax provisions including a permanent reinstatement of Section 179 bonus depreciation. Now is the time to purchase the equipment your practice needs for continued growth. Combine the bonus depreciation of Section 179 and an equipment lease to increase profits and better manage your practice's cash flow. 

Section 179 Quick Facts 
+ Deduction Limit $500,000
+ Limit on Capital Purchases $2,500,000
+ Bonus Depreciation 50%

Simplified: Equipment Leasing + Section 179
Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and software purchased, financed, or leased during the tax year. When your practice leases equipment and software and then takes the Section 179 Deduction, you can deduct the full amount of the equipment and software without paying the full amount this year. Also, with a capital lease, your practice can spread out the purchase cost of the equipment so the budget is unaffected by year-to-year fluctuations arising from investments in equipment and software.

The amount you save in taxes can actually be more than the amount you pay out of pocket. 
When used with a full Section 179 deduction, certain types of equipment leases will enhance your profits since the deductions for equipment and software purchased will exceed your cash outlay in 2016. And, you are getting the equipment you need to grow your firm now.

What qualifies for Section 179 Deduction?
+ Equipment purchased for business use
+ Tangible personal property used in business
+ Computers and related equipment
+ “Off-the-shelf” computer software
+ Office furniture and certain fixtures

Advantages of Equipment Leasing:
+ Fixed-rate financing
+ Diversity: Alternative source of funds 
+ No performance covenants
+ No blanket lien filings

Get New Equipment Now
First American can help you analyze your options and assess your potential tax savings, so that you can be confident in your equipment leasing or financing decision. Contact your First American finance specialist to learn more.
 
This communication has been prepared for informational purposes only.  Please consult your auditor for confirmation.  First American does not provide tax, legal, or accounting advice.  

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