Tax Benefits for Buying Medical Equipment

By: Lee Joseph Click author's name for more of his/her articles

If you are a medical practitioner or a medical center such as a clinic, diagnostics centre or a hospital; you will probably know that how hard it can be to keep up with the new advances in medical technology. It is helpful to have the best equipment that you can afford so that you can diagnose patients properly. Technology is changing so fast that there is always new products coming to the marketplace that can help you help your patients better. Of course, some equipment like IV Pumps are never out of style and they can be used in any medical institution for years and years until they are worn out. If you are looking ot replace old equipment, or get into another type of work to provide a different income stream, you will probably have large purchases every year.

Many facilities have little cash on hand to put toword new purchases. Many times leasing may be a good option. With the slowdown in the economy many times this could be your only option. There are several reasons to buy your equipment before year's end.

During the first year of your puchase you can depreciate your equipment. Buying your equipment before year end will allow you to deprectiate it at the end of the year. Many time you can depreciate you equipment up to 50% in the first year. Depreciation in essence means that you are able lower the value of your equipment by its usage and the number of years that it has been used. With time and usage, your equipment becomes less valuable. Your equipment's loss in value will be your gain come tax time. Equipment costs are higher than ever, an so are the tax benefits because of the large dollar amounts associated with buying new equipment. So not waiting for the next year and buying your medical equipment before the end of the year can be beneficial in terms of depreciation, as you will deduct some percentage (up to %50) this year and you will also depreciate some of the value next year (up to %10). Thus, you get benefit from at least two years or more when you buy the medical equipment before the end of the year. This can be of great benefit to you.

The IRS recently announced a new tax code. They are offering an accelerated depreciation in some cases. This will allow you to get the tax benefit sooner rather than later. Section 179 of the tax code is the code that you need to learn more about. You can look it up by doing a search in your favorite search engine. In addition, the total investment that you are able to make through Section 179 has been increased to $ 400,000 per year.

With this new knowledge, it may make sense to purchase your equipment before the end of the year. They are pretty good incentives and buying a medical equipment of even $ 100,000 can be deducted up to %100 with the depreciation incentives and with the Section 179 combined. Saving money can be easier with this new tax code. Many times you can save big with the tax savings that are now available. Not to mention you will help stimulate the economy. If you don't have the cash flow to purchase the equipment that you need, many times there are tax deductable options available to you.

Always check with your tax advisor for all tax related advice. Notify your accountant of the tax codes that are mentioned in this article.

As you can see there may be some tax benefits to buying in this calendar year. It is also important that your purchase price is competitive to maximize the purchasing process. Be sure to work with Medical Equipment Pros to ensure that you buy the right equipment at the best price.

References

CNY Business Journal

Kent Harlan (CPA)"Benefits of Tax Deductibles for Medical Equipment"

US Code Title 26 - Internal Revenue Code

Internal revenue Service Publications Form I-944

Article Source: ABC Article Directory

About The Author: Lee Joseph assists medical professionals find the medical equipment products they need at a competitive price. You can start working with the Medical Equipment Pros by visiting them at MedicalEquipmentPros.com.