How to Take Advantage of the Section 179 Tax Deduction in 2024
If you own a dental practice, the Section 179 tax deduction may help you lower your taxable income and help you save on your business taxes for 2024. Learning more about this valuable tax incentive can help you reduce owed business equipment taxes and help you plan for your practice's future.
What is the Section 179 tax deduction?
The IRS Section 179 deduction is a federal tax incentive designed to help small and medium-sized businesses. This deduction allows businesses to expense the cost of qualifying tangible property, like equipment or machinery. This can lead to significant tax savings.
How does the Section 179 tax deduction work?
Any dental practice filing a U.S. Business Income Tax Return for 2024 is eligible to take the Section 179 deduction. The equipment must be acquired in 2024 and installed or placed in service by Dec. 31, 2024.
I recently bought new equipment. What more do I need to know about qualifying for Section 179?
Coordinate with your equipment provider to ensure there's enough lead time to install your equipment before the end-of-year deadline.
If your new equipment requires employee training, you will need to schedule the training as soon as possible to meet the deadline.
Keep in mind that if you pay for equipment in advance but fail to install it by Dec. 31, 2024, the Section 179 deduction will not apply for 2024. You may also need to meet other eligibility requirements under Section 179.
What kinds of equipment purchases qualify for the deduction?
Most of the equipment you'll purchase, finance, or lease for your practice will qualify for the deduction, provided that it is used more than 50% of the time for business purposes. A few examples of qualifying purchases include:
- Business vehicles
- Improvements to existing facilities of the office, such as HVAC, security, fire alarms, and roofing
- Computers
- "Off-the-shelf" software for your dental practice
- Equipment or machines such as Digital X-Ray, CBCT, Intraoral Scanners, Curing Lights, 3D Printers, Ultrasonic Scalers, Air Polishers, and accessories
- Office and operatory furniture, including patient chairs, cabinets, and tables
The IRS often reviews freight bills and bills of lading during audits to confirm equipment delivery and installation dates. Retain these documents for potential audits.
Is there a limit on how much money I can deduct in 2024?
The Section 179 deduction limit for 2024 is $1.22M. Therefore, your dental practice can deduct the total cost of qualifying equipment (new or used, leased or owned), up to $1.22M, from your taxable income in 2024.
The tax deduction applies until you reach a yearly spending cap of $3.05M. The spending cap was implemented to ensure the deduction remains an incentive for small businesses.
Who should I contact to claim the tax deduction for dental practices?
If you have questions about Section 179, contact your CPA or tax professional. They can help you determine if taking the Section 179 deduction is the right choice for you and your practice. In addition, your tax professional may be familiar with other tax provisions that may provide additional tax savings.
%20(1).png)