News | November 09, 2006

Acquisition of Medical Equipment Before Year End Results in Tax Break

With this year's $108,000 Section 179 limit, medical purchases completed before Dec. 31, 2006 can count as eligible equipment acquisitions in this fiscal year.
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 $108,000, but the items 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:
Medical equipment of all types, electronics and other (i.e. IPL, lasers, computers)
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

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