Section 179 Tax Deduction Ends 12-31-14




On December 3rd the Tax Extenders Bill was passed by the House and it is slated to be voted on by the Senate in the coming days.  If passed by Senate, the bill is expected to be signed into law by the President.  While some Senators said they would prefer extending the bill for two years and others stated it is “imperative” to pass the bill, the majority leader stated that they may not be able to pass the bill before the end of the year.

Section 179 was designed with businesses in mind and almost all types of “business equipment” that your company buys or finances qualifies for the Section 179 deduction.  Computers, software, office furniture, vehicles, or other tangible goods are all included.

EHR software is just one of the expenses that qualify as any “off-the-shelf” computer software that (a) is not custom designed, and (b) is available to the general public is qualified for the Section 179 Deduction in the year that you put the software into service.

For basic eligibility, the software must meet all of the following general specifications:

  1. The software must be financed (only specific type leases or loans qualify), or purchased outright by you.
  2. The software must be used in your business for income-producing activity.
  3. The software must have a determinable useful life.
  4. The software must be expected to last more than one year.

In addition, these three specific stipulations must be met:

  1. The software must be readily available for purchase by the general public.
  2. The software must be subject to a non-exclusive license.
  3. The software must not have been substantially modified.

Here are some quick points about Section 179

  • Section 179 is a tax code created to help businesses by allowing them to deduct the full amount of the purchase price of equipment (up to certain limits).
  • Section 179 is valid on most types of equipment.
  • By deducting the full cost, Section 179 lowers the amount you pay for equipment and/or software substantially.
  • All you need to do is buy (or lease) the equipment, and use a special IRS form. That’s it.
  • There is simply no better time than now to take advantage of Section 179

As only the 2014 tax year will be covered by this vote and this is why, from a tax standpoint, it is a good business decision for many to buy/finance equipment immediately to make the December 31, 2014 cutoff for the write-off provisions.

This is a Use-It-or-Lose-It write-off that ends December 31st –  so contact your EHR provider today – there’s no time like the present to purchase or upgrade your hardware and medical record software like Medisoft, Lytec or Greenway PrimeSuite.


U P D A T E:  12-17-14

On Tuesday night, 12/17/2014, the US Senate voted overwhelmingly to restore #Section179 deduction levels for 2014, but this is for 2014 only! Businesses have less than 10 business days to make a qualified purchase such as software or hardware to take advantage of the tax break. Why this is so important?

To give you an example, if a medical practice has a profit of $100,000 (to use simple math) they have to come up with $35,000 in taxes by April 2015 (using standard 35% tax bracket). If that practice takes advantage of Section 179 and leases $35,000 of qualified equipment such as software and/or hardware, now they have to pay $0 in taxes for the same April 2015.

Please consult your accountant or financial adviser for your specific savings, and contact Microwize Technology today to take advantage of Section 179 before 2014 ends.