As we make our way into 2017, one day looms larger than all others: Tax Day.
Many medical practitioners and those in private practice will be busy the next several weeks preparing for the big day (April 18, in case you didn’t know). One of the most important parts of their tax filings is Section 179. This is the part of the tax code where businesses can deduct the cost of qualified equipment and software.
Each year, Section 179 is a little different, so let’s forget about past years and consider how it will affect you in 2017.
Limit for deduction
Businesses can deduct the full purchase price of new and used equipment and off-the-shelf software if it is purchased or financed between January 1, 2017 and December 31, 2017.
To qualify for the Section 179 deduction, companies can spend a maximum of $2 million on equipment in 2017. This cap exists to ensure Section 179 remains a true “small business” deduction.
The bonus depreciation isn’t always offered, but in 2017, it is being offered at 50 percent. The “bonus” is that even if you spend more than $2 million on equipment, you can still get a 50 percent deduction on new equipment you buy that goes over the spending cap.
With this in mind, the bonus depreciation makes 2017 a good year to buy extra equipment.