Ok, full disclosure, I haven’t worked day-to-day in a dental practice in a number of years. But I always remember this time of year because we remind our patients about that December 31st dental insurance companies’ benefit deadline. “USE IT OR LOSE IT.” According to the National Association of Dental Plans, only 2.8% of people with PPO dental plans actually reach their annual benefit. Flex Spending Accounts are no exception. These tax-free dollars need to be spent! It’s free money, right? Geesh! Nonetheless, it is important that we remind our patients that we are thinking about them.
Maximizing benefits is something discussed more between doctor and patient than anything else. But what benefits do you have as a small business owner? Tax benefits!
There are 30.7 million small businesses in the United States which account for 99.9% of all U.S. businesses. Section 179 is a federal rule that aids these small businesses. Instead of small business owners being forced to deduct an asset’s value over the course of many years, Section 179 offers businesses the opportunity to deduct the full price of qualifying equipment in a single year.
This is a stretch but much like the way an employer offers dental insurance and flex spending accounts, your patients are incentivised to stay put and encouraged to maintain a healthy mouth. The U.S. government created this incentive to spur economic growth and encourage small businesses to invest in themselves by purchasing equipment and/or making improvements to improve the services they offer. This has your dental practice written all over it!
The maximum Section 179 deduction is $1,020,000 with spending a spending cap of $2.5 million up over half a million dollars since 2017.
This boon will not be around forever. The 100% depreciation amount will remain in effect until January 1st, 2023. That means that the first-year bonus depreciation amount will decrease for property (improvements) in service after December 31st, 2022.
Ok, so this tax crap is not my forte but it doesn’t take a PhD in economics to know that small business owners (hint, hint - dental practice owners) should not wait to update your computers and software, buy that CBCT machine, buy new dental equipment, buy that building with the specs you’ve always wanted in a location to practice, remodel, add new technology.
Oh and before you start that sentence, “But COVID happened…….”, consider this: improvements to your air conditioning and ventilation qualify, too.
Since 1995, Ergonomic Products has been manufacturing dental equipment solutions that have proven to increase the value of dental practices all over North America. That value is determined by the number of patients and production dollars; a simple fact we understand better than any other dental equipment manufacturer. Since COVID, Ergonomic Products has not stopped considering your value proposition. How do we make the dental practice better for the team and the patients? The answer is the Safe-T-Shield™, the only extra-oral suction device that provides a high-volume barrier to droplet and bioburden ejection while still allowing comfortable access to treatment. We believe that installed Safe-T-Shields will become the future standard of care.
So here’s your PSA…..it’s time to invest in your business. Whether you are planning for retirement or just getting started, now is the time to make improvements. How will you maximize your 2020 Section 179 tax deduction? Do what you ask of your patients - “use it or lose it!”
