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irs section 179

Med Spa Owners: How much money can IRS Section 179 save you in 2022?

By belvedereSpa Owner Resources

IRS Section 179 Deduction

The IRS Section 179 tax code permits businesses to deduct the full purchase price of qualifying software and/or med spa equipment purchased or financed within the current tax year. This means that if you lease a piece of med spa equipment that qualifies for this deduction, you may deduct the Full Purchase Price from your income. This is an incentive in hopes that businesses will invest in themselves, thereby helping the overall economy. So, talk with your tax professional, and find out how Section 179 can directly benefit your business this year.

IRS Section 179 Real World Example

As a business owner, when you acquire med spa equipment, your are usually allowed to write it off bit by bit through depreciation. For example, if you spend $125,000 on a machine, you are allowed to write off about $25,000 for each of the following five years. Wouldn’t it be nice to be able to write off even more the same year purchased… like all of it? If you could, mightn’t you purchase even more equipment, or an extended service contract, or a software upgrade? That’s where the IRS Section 179 comes to the rescue. Many, in fact most, small business purchases totaling less than $500,000 can be written off 100% on your 2022 tax return.

IRS Section 179 Limitations

You may write off up to $500,000 of qualifying med spa equipment purchased in the current year. Being created with small businesses in mind, the deduction begins to be reduced dollar for dollar once you have spent $2,000,000 within the current tax year.

  • Initial Equipment Cost: $50,000.00
  • 1st year write-offs- Section 179 deduction: 50,000.00
  • Bonus depreciation (50% after Section 179 deduction) + $0.00
  • Annual Standard Depreciation of 20% for Years 1-5 + $0.00
  • Total deduction in 1st year: $50,000.00
  • Tax savings (35% tax bracket assumed): $17,500.00

Bottom line equipment cost after tax savings: $32,500.00

In order to qualify for the Section 179 Deduction, the med spa equipment must be purchased, financed or leased and put into service by December 31 of this year! This is not legal, tax or financial advice. You should consult with your tax adviser for the specific impact to your business. Calculate Your Deduction Today!

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