Section 179 Deduction Limits for 2015

Fluctuations in Section 179 deduction limits over the past three years have triggered uncertainty among dental practice owners planning on purchasing equipment this year and beyond.

During the economic recession, the deduction limit for equipment purchases was raised from $25,000 to $500,000 per tax year and included an additional bonus depreciation measure. However, as the economy rebounded, the $500,000 limit was no longer a guarantee and has survived on a year-to-year basis, as was the case at the end of 2014 when Congress extended the limit to $500,000 for the 2014 tax year.

As of now, no such extension agreement has been reached for 2015, so the deduction limit remains at $25,000 for the 2015 tax year. Although $25,000 isn’t as desirable as $500,000, Section 179 can still provide relief to dental practice owners purchasing equipment in 2015.

ELIGIBILITY & QUALIFICATIONS

All dental practices that lease, finance or purchase equipment with a total value of less than $200,000 qualify for the Section 179 deduction. Up to $25,000 of new and used equipment is eligible for deduction for the 2015 tax year, as long as it is purchased or financed and placed into service between January 1 and December 31, 2015.

DEPRECIATION DEDUCTION BENEFITS

While Section 179 doesn’t increase the total amount you can deduct in a single year, it allows you to benefit from the deduction all at once. For example, rather than having to deduct the value of a new ultrasonic scaling unit over the course of several years, Section 179 allows you to deduct the entire expense of the unit in a single year.