Section 179: Radiology Equipment Tax Deduction for 2018

Section 179 offers radiology equipment tax savings for some small businesses.

New radiology equipment and medical printing solutions have the potential to improve an imaging center’s bottom line through increased patient throughput. But did you know that there is also a possible radiology equipment tax deduction through Section 179 for small businesses?

calendar with tax day circled on it

Learn about tax credits for radiology equipment!

Under tax legislation passed by the federal government to help small businesses purchase capital equipment and spur economic growth, you might be able to write off (i.e. deduct) the entire amount of a purchase at one time (subject to certain limitations), rather than its depreciated value over time.

Under current tax law, this year’s Section 179 deduction allows business owners to write off up to $1,000,000 on overall property. However this amount is limited if total purchases exceed $2,500,000 during the year.

Additional details can be found at https://www.irs.gov/publications/p946/ch02.html and http://www.section179.org.

To understand the potential radiology equipment tax deductions that might apply under Section 179, refer to the following table:

Tax Credit How It Works Potentially Qualifying Purchases
Section 179 Deduction Write off up to $1,000,000 on overall property value of up to $2.5 million

Purchases must be made and placed in service by December 31, 2018

Digital Technology

X-ray systems

In-office CT units

Computed radiography systems

Medical printing solutions

Software

Imaging software

Case management software

Bonus Depreciation Take a bonus 100% first year depreciation on equipment placed into service by December 31, 2017 (phases out in 2022).

This can be used for the cost of qualifying property (to the extent not expensed under §179)

Now includes used equipment (but not software)

So, how do these deductions work? Let’s say you purchase $150,000 worth of medical imaging technology. Here’s one way the numbers might break down:

Example Calculation
Equipment Purchases: $150,000
2018 Section 179 Deduction Write Off: $150,000
Tax Savings: ($150,000 * 21% tax rate) $31,500
Equipment cost after Section 179 : ($150,000 less all tax deductions) $118,500

Remember that tax laws can be complex and subject to change. Accordingly, before making any major purchase decisions, please speak to your business accountant and tax or financial advisor(s). #radiology #section179

Read the blog to learn how to build orthopaedic practice revenue.

Sarah Wake is a Senior Manager with responsibility for domestic and international tax at Carestream Health. She has more than 13 years of tax accounting experience, including more than 8 years in public accounting withe PwC.

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