Investing in medical imaging equipment like X-ray, MRI, CT or ultrasound machines can be a significant financial burden for healthcare practices.
However, Section 179 of the IRS tax code offers a great opportunity for healthcare providers to offset some of these costs by allowing immediate tax deductions for equipment purchases. This can provide much-needed financial relief, making it easier for you to modernize your equipment without sacrificing your practice’s financial health. Here’s how it works.
- You Get An Immediate Deduction For Equipment Purchases
Under Section 179, medical practices can deduct the full purchase price of qualifying imaging equipment in the year it’s placed into service, rather than spreading the depreciation over several years. This immediate deduction can substantially reduce taxable income in the same year, improving your cash flow. Whether you’re a large diagnostic center, Urgent Care or small practice or clinic, this upfront tax savings can free up capital for you.
The Section 179 deduction limit in 2024 is $1.16 million. CT scanners, digital mammography systems and fluoroscopy machines can qualify for this deduction.
- It Encourages the Adoption Of Advanced Technology
New, more advanced imaging systems are being introduced regularly. In order to stay competitive and ensure cutting-edge patient care, you want to utilize the latest technologies. However, high-tech imaging equipment like 3D mammography or dual-energy CT systems are expensive. Section 179 allows you to invest in the latest technology by lowering the effective cost of these investments.
- Section 179 Applies to New And Used Equipment
One of the most significant benefits of Section 179 is its applicability to both new and used equipment. For healthcare practices that want to upgrade their imaging capabilities without breaking the bank, purchasing high-quality used or refurbished equipment is very cost effective. Section 179 lets you get a full deduction on these purchases, so you can get the performance you want at less cost. You can deduct the full purchase price of qualifying equipment and/or software. You can lease up to $3,050,000 in medical imaging devices in 2024. Plus, you can take up to $1,220,000 of the Section 179 deduction, with a cap on total equipment purchases up to $3,050,000.
- It Boosts Profitability
By maximizing tax savings and improving cash flow, Section 179 can significantly boost the profitability of your healthcare practices. Plus, the faster deduction provides immediate return on investment (ROI), helping you quickly recoup costs and allocate resources to other areas of the business.
- It’s Easy
One of the reasons Section 179 is so popular is its simplicity. Unlike more complex tax deductions or depreciation schedules, the process of claiming a Section 179 deduction is relatively straightforward. As long as the medical imaging equipment is purchased, financed or leased and put into service by December 31 of the tax year, it qualifies for the deduction. The equipment can be fully or partially financed, making it easier for medical practices to leverage this tax break without needing to pay the full amount upfront.
Of course, you should talk to your tax professional or accountant who understands Section 179 and medical equipment.
Talk To An Expert Sooner Than Later
You have to act quickly in order to take advantage of Section 179 because you have to budget your device, prepare your site and have the equipment shipped and installed before 2025. But, if you want to upgrade your medical imaging equipment, Section 179 provides a powerful financial incentive. By allowing the full deduction of equipment purchases in the year they’re made, this tax provision will significantly reduce the cost of high-tech imaging systems. To view the specifics about Section 179, visit their site here!
Talk to the experts at Atlantis Worldwide, who can help you find the perfect medical imaging equipment to fit your needs and your budget—and take advantage of Section 179.
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About the author: Vikki Harmonay
