2022 is just around the corner.
Are you aware of the enormous benefits of Section179?
In a nutshell, if your ophthalmic practice purchased, leased, or financed equipment or software in 2021, you may be able to deduct the full price from your gross income.
If you were unaware of Section 179 before now, there is still time to buy or lease new or used equipment before the fiscal year ends and receive the full deduction—which means now is the perfect time to upgrade to a state-of-the-art digital practice.
What is Section 179?
Section 179 of the Internal Revenue Code (IRC) allows businesses to deduct the total purchase price of qualifying software and equipment during the tax year. Ultimately, the goal is to help small to medium-sized businesses be successful and enjoy a tax break.
How does Section 179 work?
After purchasing a piece of new or used equipment, rather than receiving yearly tax deductibles ($5,000 per year for five years, for example), Section 179 allows the entire cost to be written off—as long as the total is under $1,050,000.
Qualifications for Section 179 tax deductions
If your ophthalmic practice purchased, financed, or even leased new or used equipment during the 2021 tax year, you qualify for Section 179. From EMR software to digital refraction systems, most ophthalmic equipment and software qualifies—as long as it was purchased or financed and put to use between January 2021 through December 2021.
Are there limitations?
Yes. Because Section 179 was designed to help small and medium-sized businesses, there are spending caps on equipment purchases. However, these are typically fairly high, which gives you the freedom to update and modernize your ophthalmic office without losing money.
What about bonus depreciation?
Once the Section 179 spending cap is reached, you may be eligible for a first-year bonus depreciation of 100 percent. This is an additional deductible above what is available with Section 179, and it allows you to deduct a percentage of the cost of your equipment in the first year it was purchased.
Under prior law, bonus depreciation could only be applied to new equipment. However, the Tax Cuts and Jobs Act of 2017 altered that rule, and bonus depreciation may now be used for purchases of new or used property.
What is the 50% use minimum?
This is an important qualifying factor for Section 179 deductions. Obviously, the equipment or software being purchased must be used for business purposes, and the 50% minimum requires that this is the case at least half the time.
If, for any reason, the equipment purchased is not used solely for business purposes, you are only allowed to deduct the percentage of the cost equal to the percentage of business use. Therefore, you can multiply its total purchase cost by the percentage of its business use to determine the amount eligible for your Section 179 deduction.
Veatch equipment is Section 179 qualified.
At Veatch Ophthalmic Instruments, we do everything we can to ensure our customers have access to top-quality equipment at the best prices. This includes keeping you informed of money-saving opportunities such as Section 179 that can help you grow and scale your practice.
Our equipment is Section 179 qualified, meaning when you purchase or finance your new or used equipment through us, you not only receive a full tax deduction but also update your practice and receive the added benefits of our outstanding service and repair team.
Ophthalmic technology is advancing rapidly—use this opportunity to stay ahead.
You owe it to your patients and your practice to stay ahead of the curve. The Section 179 deduction is the perfect opportunity for you to update your office to the new digital age standard. Browse our comprehensive selection of digital refraction systems and consider making the switch before the end of the tax year.
If you have additional questions about Section 179 or about outfitting your practice with the latest digital equipment, contact Veatch Ophthalmic Instruments today.