ePractice Check Up Newsletter
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Economic Stimulus/Section 179
Congress extends the amount that small businesses may write-off for capital expenditures to $250,000!
The Section 179 Deduction increases have been extended through December 31, 2009! This means that for 2009, the write-off amount is up to $250,000 and there is still a bonus 50% depreciation.
What is Section 179 and how can it help your practice?
Simply put, the IRS tax code Section 179 allows businesses to deduct the full price of qualified equipment purchased or financed in 2009. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income. Qualifying equipment must be placed in service between January 1, 2009 and December 31, 2009.
How does Section 179 work?
When your practice buys certain pieces of equipment, it typically gets to write them off a little at a time through depreciation. In other words, if your company spends $50,000 on a vehicle, it gets to write off, let us say, $10,000 a year for five years – these numbers are only meant to give you an example.
While this is better than no write off at all, most business owners would really prefer to write off the entire equipment purchase price for the year they buy it. In fact, if a business could write off the entire amount, they might add more equipment this year instead of waiting. That's the whole purpose behind Section 179. Below are a couple example sample tax saving calculations – please consult a tax advisor for details about saving money with Section 179.
| EXAMPLE 1 | |
| Equipment Cost: | $300,000 |
| 1st Year Write Off: | $250,000 |
| 50% Bonus Depreciation (on remaining value): | $25,000 |
| Normal 1st Year Depreciation: | $5,000 |
| Total 1st Year Deduction: | $280,000 |
| Tax Savings (Assuming a 35% Tax Bracket): | $98,000 |
| Cost of New Equipment After Tax Savings: | $202,000 |
| EXAMPLE 2 | |
| Equipment Cost: | $35,000 |
| 1st Year Write Off: | $35,000 |
| 50% Bonus Depreciation (on remaining value): | $0 |
| Normal 1st Year Depreciation: | $0 |
| Total 1st Year Deduction: | $35,000 |
| Tax Savings (Assuming a 35% Tax Bracket): | $12,250 |
| Cost of New Equipment After Tax Savings: | $22,750; |
The Section 179 deduction is typically recognized on $1 finance options only.
What are preferred ways to utilize Section 179?
Equipment leasing to utilize Section 179 is the preferred finance option for many businesses.
Non-Tax | Capital Lease
The benefit of a Non-Tax/Capital Lease is that it can take advantage of Section 179 and preserve your cash flow with minimal monthly payments. In addition, you may depreciate any excess on the depreciation schedule for that asset.
Equipment Financing
You may also obtain an equipment loan using an Equipment Finance Agreement (EFA) and still take the Section 179 Deduction.
Advantages of Leasing and Financing The obvious advantages to leasing or financing equipment and then taking the Section 179 Deduction is the ability to deduct the full amount of the equipment, without paying the full amount this year. The amount you save in taxes can actually exceed the payments!
What equipment qualifies for Section 179?
- Equipment (machines, etc.) purchases for business use
- Tangible personal property used in business
- Business vehicles with a gross vehicle weight in excess of 6,000 lbs
- Computers
- Computer software (off the shelf)
- Office furniture
- Office equipment property attached to your building that is not a structural component of the building (i.e.: a printing press, large manufacturing tools and equipment)
- Partial business use (equipment that is purchases for business use and personal use – generally, your deduction will be based on the percentage of time you use the equipment for business purposes)
For more information, visit www.section179.org.
Don't forget this month's Lunchbox Webinar!
Remember, you can check our online Events and Training Calendar any time for up-to-date information and upcoming events!
PRACTICE AND CLINICAL REPORTS GENERATION |
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| Date | Friday, April 24th, 2009 |
| Time | 1:00 - 4:00pm EST |
| Registration | |
The Reports Generation webinar is a two-part advanced training class that covers how to use and build reports in PrimeSuite. Topics include report types, report customization, and PrimeSuite using the report designer. The class is divided into 1.5 hours for Practice reporting and 1.5 hours for Clinical reporting. Participants can elect to attend one or both parts of the course. Who should attend: Any staff members required to generate reports in PrimeSuite. |
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Don't Miss This Week's Hot PrimeSuite Tip!
How to import from a previous document.
To import all or parts of note sections from a previous document, follow these steps:
- Go to Create Note and select the note type (Progress, H&P, etc.)
- Before selecting a template note on the Dark Side, just above Select Template is Import Document – click this Import Document
- A window will appear where you can select any previous document as well as what sections you want to import from the document. You select the sections of the document first. Then select the document you want to import from the list.
Tips: If you do not check any of the sections to import, the default sections will load. The default sections are the sections that you last selected when you used Import Document. If you have never used Import Document, no section will be checked.
You can import sections of one type of document into another. This is a slight break from the way PrimeSuite works with note types. When you start a note you will notice that the templates you see are driven buy the note type you have selected. For instance, if you select a procedure note to document, you only see procedure note templates. You can not merge procedure notes and H&P notes when you start to document a patient encounter. However, if you have completed a procedure note and you want to use it as part of a progress note, Import Document allows you to bring sections from a procedure note into a progress note.
