303.225.0960For practices and hospitals subject to taxation by the U.S. Internal Revenue Service, the Section 179 deduction for fixed assets is pretty close to magic. That's because it lets you deduct the full purchase price of qualifying equipment purchased or financed during the tax year rather than capitalizing and depreciating it over time.
In a nutshell, this provision of the tax code allows you to write off up to $1,040,000 in tax benefit on qualifying assets costing up to $2,590,000. Most tangible goods used by American businesses qualify -- including Biovision's EndoDiagnostic+Surgical Suite® EDSS and NeedleView® Arthroscope Suite.
The Section 179 deduction is one way the government encourages businesses to buy equipment and rewards them for investing in themselves. These immediate deductions can free up valuable cash for expansion, growth and self-investment. (Want to know more about the deduction, how it works, and what qualifies? Check out Section 179.org.)
Applying the Section 179 Tax Credit to Biovision Equipment Suites
NeedleView Arthroscope Suite
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- Tax year 2020
- Tax bracket of 35%
- Equipment purchased and put into use prior to December 31, 2020
- $5,232 in tax savings (calculated as $14,950 purchase price x 0.35)
- Takes effective cost down to $9,717
- The typical NeedleView customer bills each NeedleView procedure at $1,000 and performs 2-4 procedures per month...resulting in a potential first-year ROI of 247% (click here for a full ROI calculation)
EndoDiagnostic+Surgical Suite (EDSS)
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- Tax year 2020
- Tax bracket of 35%
- Equipment purchased and put into use prior to December 31, 2020
- $13,632 in tax savings (calculated as $38,950 purchase price x 0.35)
- Takes effective cost down to $25,318
- The typical EDSS customer bills each EDSS procedure at $500 and performs 4 procedures per month...resulting in a potential first-year ROI of 92% (click here for a full ROI calculation)
Purchase Considerations
It's important to plan any capital expenditure — such as the purchase of endoscopic/laparoscopic and/or arthroscopic equipment suites — wisely. You'll want to factor in:
- Current and future practice needs
- Price
- Return on investment
- Useful life/depreciation
- Tax deductibility
If old equipment needs to be replaced to sustain a currently-offered service, the determination is relatively simple.
Don’t limit your vision, though! Take time to consider how new equipment or technology could:
- Help expand your service lines
- Add to your skills
- Reignite excitement for your work
- Set your practice apart from competitors for being innovative or offering the highest standard of care
Important Deadlines and Requirements
It’s crucial that you place your new equipment into service by December 31, 2020 if you wish to take the Section 179 deduction for the 2020 tax year. Orders should be placed ASAP to allow sufficient time for processing, shipping, delivery/set-up and integration into your practice by December 31.
