A Section 179 tax deduction may allow dental laboratories to take a tax deduction for the cost of qualifying purchases, such as new equipment and technology, in the year it is purchased into service. Section 179 can result in a 2021 tax deduction for up to $1,050,000, help lower your taxable income, and increase cash flow.*
Especially now, as many dental laboratories are adapting to the current environment by implementing new standards of care, a Section 179 2021 tax deduction could be a win-win. Not only are you investing in your laboratory with the equipment, technology, and tools needed to become more efficient and provide better care, but you can also be eligible for a tax deduction with Section 179.* New equipment and technology are great examples of tax deductible expenses for laboratories with Section 179.
To qualify for a Section 179 tax deduction on your 2021 taxes, you must purchase and place qualifying dental equipment and technology into service by 12/31/2021, in addition to meeting other eligibility criteria under Section 179.*
dental eqquipment or technolog, before December 31st.
up to $1,050.000 in equipment and technolog costs (with a $22.5 million purcahse limit)
on your taxes when equipment is purcahsed & placed into service within the same year.
Frequently Asked Questions many dental laboratory owners have regarding an IRS Section 179 tax deduction.
Section 179 is a tax deduction for businesses, including dental laboratories, that receives its name from Section 179 of the IRS Tax Code. Section 179 allows dental laboratories to deduct up to the full purchase price of qualified equipment, technology, off-the-shelf software, and other qualifying purchases from their taxes within the same tax year, rather than requiring that the purchase be depreciated over time.
Qualifying purchases for dental practices include equipment, technology, software, computers, office furniture, roofs, heating/AC systems, air ventilation systems, and more. To qualify for a Section 179 deduction, these purchases must be used for business purposes 100% of the time. See the IRS guidelines for a comprehensive list of qualifying purchases.
The maximum tax deduction for 2021, is up to a $1,050,000 tax deduction.
In 2021, the equipment purchase limit for small businesses, including dental laboratories, is $2,590,000.
One of the great things about the Section 179 tax deduction is there are more options than you might realize for the type of equipment and technology you can claim. Equipment or technology purchases can be either new or pre-owned, giving you a broader range of choices.
Eligible: Equipment financing agreements Equipment leases with a $1.00 purchase option (capital leases) Loan Agreements Not Eligible: Operating Leases - those with a purchase option (i.e.,10% Purchase Option Leases, Fair Market Value Leases) at the end of the agreement DO NOT qualify for a Section 179 deduction.
Section 179 is the tax deduction businesses can take when they purchase and place qualifying purchases (such as new equipment or technology) into service in the same year. In 2021, the first-year bonus depreciation is 100%. Bonus depreciation is used in addition to the Section 179 deduction for businesses that purchase equipment valued over the Section 179 equipment purchase limit. The 2021 equipment purchase limit is $2,590,000.
In order to take advantage of a Section 179 tax deduction for 2021, you will need to have purchased the qualifying equipment or technology this year for your business. This means you have until December 31, 2021, to purchase and place the equipment or technology into service if you seek to deduct it from 2021 taxes.
After determining if a Section 179 deduction is right for you, you should work with your tax advisor to determine your deduction amount. Using the proper forms from the IRS, You'll simply select the dollar amount of equipment under Section 179. You'll include the form in your tax return when you file. Please consult with a qualified professional tax advisor to determine your eligibility for a Section 179 tax deduction. Neither Henry Schein, Inc. nor Henry Schein Financial Services provides tax advice.
It's a good idea to calculate potential tax savings in advance. Use the Section 179 deduction calculator above, to help you get a better idea of your potential savings. Regardless, you'll want to discuss with a tax professional to determine if taking the Section 179 deduction is the right choice for your practice and tax situation. You have the opportunity to take a Section 179 tax deduction in the same year you place your equipment in service. Neither Henry Schein, Inc. nor Henry Schein Financial Services provides tax advice.
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