To help small business owners grow, the government passed tax laws to promote that growth by accelerating tax reductions through deduction and depreciation opportunities. New equipment purchases can be either depreciated over their useful life, or expensed immediately under the IRS Section 179 tax code, up to $139,000 for the 2012 tax year.* In addition, the government has also included a 50% bonus depreciation that can be used in conjunction with the Section 179 allowance.* These deductions help increase cash flow for the business owner, resulting from the reduced tax liability created by the use of the Section 179 deduction and the 50% bonus depreciation.
Now is the time to take advantage of Section 179 by purchasing equipment and technology before the end of this calendar year. In 2013, the Section 179 allowance is scheduled to be reduced to a maximum of $25,000, and the 50% bonus depreciation will be discontinued. For example, a $200,000 equipment purchase this year would result in an additional $40,000 tax savings over purchasing that same equipment next year.**
Don’t miss out on lowering your taxes for 2012. Invest in new equipment for your practice before the end of the calendar year. Investing in equipment and technology could improve efficiencies, increase productivity, build your practice reputation and help to acquire more patient referrals, as well as lowering your taxes.
*The information above provides general guidance in applying tax credits and tax deductions. This should not be construed as providing financial advice, tax advice and/or rendering advice on tax return preparation. Consult your tax advisor to best assess your tax savings.
**Assumes 35% tax bracket.