Year-end Money Moves:
Taking Advantage of Increased
Tax Deductions for 2013
Sean Hanlon, Director of Professional
Communications
Physicians Office Resource
T
hinking of buying a new analyzer or
upgrading old equipment? Acting
before the end of the calendar year
might be in your best interest.
Section 179 of the IRS tax code
encourages small business owners to invest in
equipment or technology by allowing the
deduction of
100% of the
asset’s value in
the first year.
When
physician
practices
acquire new
equipment –
including lab
equipment,
analyzers,
furniture,
certain software
and more – they may deduct up to $500,000 of the
value during the first year of ownership.
Interestingly, Section 179’s threshold was
scheduled to be reduced from its limit of $139,000
in 2012 down to a mere $25,000 in 2013.
However, as part of the “fiscal cliff” legislation
passed at the beginning of 2013, the deduction
maximum was actually increased to $500,000.
There’s no telling what Congress will put in place
for 2014 but it’s not hard to see where the
threshold might be reduced for next year.
Practice owners in the market for equipment
are well served by considering executing
purchases before year end.
The chart below displays a simplified example,
using a hypothetical purchase of one or more
pieces of
equipment
totaling
$100,000. (The
IRS has details
and particulars:
irs.gov/
publications/
p946/
ch02.html.)
In any normal
year, the
NovemberDecember
timeframe offers one of the best times to make
larger investments. Manufacturers and distributors
typically have incentives programs in place for
their sales reps, quarterly and annual quotas to
meet, and price discounts for you. This year, add
in the very high Section 179 discount threshold of
$500,000 – unique for 2013 – and now might be a
good time to pull the trigger on lab equipment, a
new exam table or off-the-shelf software.
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