Section 179 Deduction: What Chiropractors Need to Know

A Breakdown of How to Maximize Your Practice’s Savings with the Section 179 Tax Write-Off  

The business side of being a chiropractor is challenging—but when it comes to the Section 179 tax deduction, it has its rewards. While tax write-offs typically aren't the first thing on your mind (that's patient care), they offer significant financial incentives. You should seize these opportunities when you can.  

In fact, that time is now. In 2023’s last quarter, you have a few months to evaluate expenses, profits, and overall financial health.  

The Section 179 deduction is an important part of this evaluation. It allows you to write off essential equipment like diagnostic equipment, therapeutic devices, or chiropractic software. That’s your chance to save thousands of dollars.  

But you don’t have to be a tax expert to get started with Section 179. It's more about learning to leverage this particular deduction to reinforce your practice's main focus: patient care. Then, you can invest in advanced tools to enhance your service quality, all while making your tax bill more manageable.

Not to mention, more savings mean more financial freedom—contributing to a better work-life balance and overall quality of life.  

Ready to learn more about what Section 179 has to offer your chiropractic practice? Here's a breakdown of the essentials, helping you make the most of this tax-saving opportunity.  

What Is the Section 179 Deduction?  

The Section 179 deduction stimulates the economy by encouraging businesses, including chiropractic practices, to invest in themselves. It allows businesses to write off the entire cost of purchasing qualifying equipment up to specific limits.  

In 2023, you can deduct more money from the purchase price, up to $1,160,000 compared to $1,080,000 in 2022. The total limit for equipment purchases also increased to $2,890,000 from $2.7 million in 2022.  

After reaching the limit, the deduction begins to phase out on a dollar-for-dollar basis. Then, it reaches zero once you purchase or finance $4,050,000 worth of equipment. Plus, businesses can take advantage of 80% bonus depreciation on both new and used equipment for the entirety of 2023.  

Section 179 also allows for an immediate deduction, unlike traditional depreciation, which writes off the equipment's cost over several years. The advantage is even faster tax benefits, enabling you to receive them upfront.

Eligible Equipment and Requirements  

This deduction doesn't just apply to machinery or physical tools. It also includes computer software for business, such as chiropractic software. Here are the essential requirements you should be aware of:  

• Purchase Date: The equipment should be purchased and in use between January 1, 2023, and December 31, 2023.  
• Business Usage: The equipment, including software, needs to be used for business purposes 50% of the time or more.  
• Eligibility: Both new and used equipment qualify, ranging from heavy-duty equipment to off-the-shelf software.  

But if you aren’t sure about the eligibility of a specific purchase, always consult with your tax advisor. They can help you determine if the specific equipment or software you want to buy qualifies for Section 179. That way, you can make the most of this opportunity.  

How It Benefits Your Chiropractic Practice  

The Section 179 write-off holds particular benefits for chiropractic practices, where equipment and supplies can add up substantially. If you're looking to upgrade essential tools or invest in advanced technology, this deduction could make a significant difference. Here's how:  

• Minimized Costs: Writing off the full purchase price right away can quickly help your practice's finances.  

• Investment in Growth: You can reinvest in your practice's equipment, such as purchasing new chiropractic treatment tables. You could also add new services, like red light therapy.  
• Improved patient care: You can use savings to enhance chiropractic care and the patient experience with advanced tech and new services.  

Given its benefits, this tax provision doesn’t just save you money. It's a practical approach that allows you to optimize your practice's potential, aligning financial savings with quality care and growth.  

Writing Off Chiropractic Software  

Chiropractic software can streamline your practice's appointment system and improve overall efficiency. If you're considering this investment, here's how to utilize the Section 179 deduction:  

• Assess Your Needs: Identify the specific software features that would most benefit your practice. This could include appointment scheduling, billing, patient records management, and more.  
• Consult with a Tax Professional: Before making the purchase, consult with your CPA to ensure the software qualifies for the deduction.  
• Implement Before the Deadline: If you decide to proceed, ensure that the software is in operation before the December 31st deadline.  
• Document the Purchase: Keep thorough records of the purchase, including receipts and proof of usage, to support your deduction claim.  

Investing in chiropractic software is a smart choice that aligns with your long-term practice goals. With the right software solution, you can streamline workflows, build stronger patient relationships, and grow your practice. Consult a tax professional to explore the best options, and remember, the choices made today could positively impact your practice's future.  

Other Tax Deductions to Consider  

While the Section 179 write-off is beneficial, you shouldn’t overlook other tax deductions and incentives for your practice.    

Practice improvements, like building repairs or expansion, can result in significant savings. Insurance premiums, travel expenses, and business meals are still partially deductible (but at a lower rate than before). It's important to keep good records and talk to a tax advisor to benefit from opportunities and follow tax laws.  

Take Control of Your Financial Health with ChiroSpring  

When every dollar counts, it's wise to explore all available options for tax savings. The Section 179 deduction presents a real opportunity for you to save money and invest in your chiropractic practice's growth. With its advantages—like write-offs for business equipment purchases—now's the perfect time to invest in tools like ChiroSpring.  

With ChiroSpring's suite of digital tools, you can alleviate the most common administrative pains in your practice. Beyond automatic ERA posting and flexible payment options, the software includes customizable SOAP note templates that meet stringent regulatory requirements. Plus, the platform's integrated billing and payment systems streamline revenue collection, making it easier to manage your financials. Both Section 179 and ChiroSpring’s all-in-one software offer you the tools for immediate and enduring financial success.    

But before making any decisions, remember that tax laws and regulations are subject to change. Always consult with a tax advisor to receive the most up-to-date information, as your practice's financial health may depend on it.  

Note: The content provided here is for informational purposes only and should not be considered legal or tax advice. Always consult with a qualified tax professional for personalized guidance.  

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References  

4 Reasons to Use Cloud-Based Practice Management Software. (2023, March 14). ChiroSpring. https://www.chirospring.com/articles/4-reasons-to-use-cloud-based-practice-management-software  

DeBusk, C. (2023, February 28). Don’t Miss These 2023 Chiropractic Tax Deductions for Your Practice. Chiropractic Economics. https://www.chiroeco.com/chiropractic-tax-deductions-for-your-practice/  

Section 179 at a Glance for 2023. (2023). Section179.Org. https://www.section179.org/section_179_deduction/  

Zallik, A. (2023, February 8). Section 179 Deduction Limit for 2023 and 2022. Beacon Funding Corporation. https://www.beaconfunding.com/blog/article/category/tax-deductions/section-179-deduction-limit-2023#:~:text=In%202023%2C%20the%20Section%20179