IRS Section 179
Last Updated on Wednesday, 04 April 2012 20:05
What is the Section 179 & how would it apply to my purchase of a MyoVision system?
Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy (or lease) a MyoVision 3G System, you can deduct the FULL PURCHASE PRICE from your gross income. It’s an incentive created by the U.S. Government to encourage businesses to buy equipment and invest in themselves.
How does it work?
When your practice purchaes certain items, it typically gets to write them off a little at a time through depreciation. In other words, if your company spends $10,000 on a new carpet, it gets to write off (say) $2,000 a year for five years. While annual depreciation is better than no write off at all, most business owners would really prefer to write off the entire equipment purchase price for the year they buy it. In fact, if a business could write off the entire amount, they might add more equipment this year instead of waiting. That’s the whole purpose behind Section 179… to motivate the American economy in a positive direction. So if you purchase a MyoVision 3G System for $14,985 before Dec 31 you can deduct the entire price from your business’ taxable income.
Are there limits?
Section 179 allows you to write off $560,000, and limits the total amount of the equipment your clinic could purchase and still be elligible for the deduction to $2,000,000.. These caps keep Section 179 a true small and medium-sized business deduction.
Who is eligible?
Any business that purchases or leases under $2 million of equipment in 2012 qualifies for this deduction. If your practice was unprofitable in 2012, and has no taxable income to use the deduction, you can elect to use 100% Bonus Depreciation and carry-forward to a year when the business is profitable. The deduction begins to phase out if more than $2 million of equipment is purchased – in fact, the deduction decreases on a dollar for dollar scale after that, making Section 179 a deduction specifically for small and medium-sized businesses.
What are the eligible expenditures?
Most tangible goods qualify for the Section 179 Deduction. For basic guidelines on what property is covered under the Section 179 tax code, please refer to this list of qualifying equipment. Also, to qualify for the Section 179 Deduction, the equipment purchased must be placed into service between January 1, 2012 and December 31, 2012.
How do I get more information?
The best way to get more information on IRS Section 179 is to consult your professional tax advisor or tax accountant. Tax laws change from year to year and a tax professional would have the most current information.
• Refer to IRS Section 179 for more detailed information.