“Our new Constitution is now established, everything seems to promise it will be durable; but, in this world, nothing is certain except death and taxes.”
If there’s one issue that we all feel strongly about, it is taxes. We understand that taxes are the price we pay for civilization. We understand that taxes pay for clean water, police protection, paved road, snow removal, and many other services that benefit us. We also agree that tax breaks are good things.
Section 179 is an especially compelling tax break for small business owners.
According to Section179.org, the deduction is straightforward:
When your business buys certain items 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 machine, it gets to write off (say) $10,000 a year for five years (these numbers are only meant to give you an example).
Now, while it’s true that 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 over the next few years. That’s the whole purpose behind Section 179 – to motivate the American economy (and your business) to move in a positive direction. For most small businesses, the entire cost can be written-off on the 2017 tax return (up to $500,000).
The legislation intends to provide small businesses with tax relief. Millions of small businesses have taken action, invested in qualifying equipment, and earned real benefits.
Section 179, like all portions of the tax code, has parameters and limitation. For example, the item being deducted must have been acquired by purchase. The IRS states:
“Property is not considered acquired by purchase in the following situations.
- It is acquired by one component member of a controlled group from another component member of the same group.
- Its basis is determined either—
- In whole or in part by its adjusted basis in the hands of the person from whom it was acquired, or
- Under the stepped-up basis rules for property acquired from a decedent.
- It is acquired from a related person.”
For aesthetic providers, Section 179 creates a win-win. The provider is able to invest in new technologies, create new competitive advantage, and elevate their reputation in the local marketplace.
The full value can be seen when we consider the speed of innovation in the aesthetic industry. It was only a short time ago, for example, that laser hair removal* providers turned up the music in the waiting room to muffle the yelps and cries of the patient being treated; and now, with the right technology, hair removal can be one of the most comfortable treatments offered.
A similar analogy applies to another staple of any aesthetic offering – skin resurfacing. With Alma’s Harmony XL PRO, providers are able to offer both erbium skin resurfacing and ClearLift, a Q-Switched skin resurfacing technology that can be done quickly and requires no post-treatment downtime. Many patients report seeing visible improvements after the first treatment, ensuring that they tell their friend and return for additional services.
In both cases, the provider with the competitive advantages is going to win. Section 179 can help level the playing field. For more info, consult with an Alma Lasers representative by clicking here.
Please note, the author of this blog is neither an authority on taxation nor a tax consultant of any kind. For that reason, all questions and concerns about Section 179 should be directed to your tax professional.
“People who complain about taxes can be divided into two classes: men and women.”
*Permanent reduction in hair regrowth defined as a long term, stable reduction in the number of hairs re-growing when measured at 6, 9 and 12 months after the completion of a treatment regime.