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Time is Running Out: Acquire Equipment Before Dec 31st Can Save on Taxes
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Added: 11/30/2005
Type: Summary
Viewed: 981 time(s)
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Time is Running Out: Acquire Equipment Before Dec 31st Can Save on Taxes
With this year's Section 179 limit set at $105,000, you may want to purchase that equipment you were debating about. The benefit? Get your shopping done before December 31st, and come April, you can count your eligible equipment acquisitions in this fiscal year.
Many MedSpa and healthcare center owners operate on the principle that purchase costs for equipment and furniture must be depreciated over a number of years for tax purposes. This, however, is often not the case. In order to stimulate economic growth, the Internal Revenue Service Section 179 states: "You may elect to expense part or all of the cost of Section 179 property that you placed in service during the tax year and used predominately (more than 50 percent) in your trade or business."
Before 2003, Section 179 deductions for each piece of equipment were limited to $25,000. With the Jobs and Growth Act of 2003, the Section 179 small-business expensing limits increased to $100,000. For this year, the amount is up to $105,000. The caveat here is that the item(s) must be in use by year-end. The expensing-limit increase will expire and return to its previous level of $25,000 after 2007 if there is no additional action by Congress.
Eligible business purchases include:
Equipment of all types, electronic and other (i.e. IPL, microdermabrasion, computers, LED)
Software
Furnishings (i.e. treatment tables, chairs, cabinets)
Ineligible purchases include:
Real estate & Investment property
Property of all types held in trust or estates (including equipment, machinery, etc.)
Detailed information on Section 179 deductions can be found on the IRS web site with “Publication 946, How To Depreciate Property.” As with any tax issues, you must consult with your tax adviser to make sure that you are taking full advantage of deductions allowed for your specific situation.
About MedSpa Financing (Oakridge Healthcare)
MedSpaFinancing.com is a division of Oakridge Healthcare, which provides turn-key healthcare financing solutions to medical practices and equipment vendors throughout North America (www.oakridgehealthcare.com). MedSpa Financing is the only financing company that specializes in financing Medical Spas. We have financed Medical Spas from California to New York, and everywhere in between. Through our network of financial partners, we have the capacity to finance everything from a single treatment machine to an entire $20 million Medical Spa facility. For additional information, visit our website: www.medspafinancing.com. MedSpa Financing is a sustaining member of the International Medical Spa Association.
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