Diagnostic Instrumentation

Tax Credit Can Reduce Purchase Price of an OCT

By ROB Editors

The Section 179 tax credit can provide a significant savings off the purchase price of a major piece of instrumentation, like an OCT. To benefit, you must make that purchase before the end of the year—so plan now to save over the long term.

Addingoptical coherence tomography (OCT) to your office is a potential practice-builder. The instrument enablesyou to detect retinal disorders such as vitreous detachment and macular degeneration to enhance your medical eyecare services. It also can be incorporated into a wellnessexam that increases revenues while imparting ahigh-tech image to your office.The barrier to entry is the purchase price of this instrument, whichranges from$45,000 and $75,000.That cost can be greatly offsetby taking advantage of ataxcode savings if you make the purchase and put the instrument to use within this calendar year.

Section 179 and Tax Savings

Section 179 of the IRS tax code allows businesses to write-off up to $500,000 of qualified equipment and software during the 2011 tax year, up from $250,000 in previous years.The tax codealso allows businesses to deduct the full purchase price of qualifying equipment purchased during the tax year. That means that if you buy a piece of qualifying equipment, you can deduct the full purchase price from your gross income. It’s an incentive created by the US government to encourage businesses to invest in instrumentation.

Note Deadline

Doctors must purchase instrumentation and put it in use by Dec. 31, 2011, to take advantage of Section 179.

Tax Credit of $16,000 to $21,000

If you purchase new instrumentation, such as an OCT, by the end of this year, your savings via tax credit can range roughly from $16,000 to $26,000. Here’s an example to illustrate:

Cost of Equipment: $45,000

Section 179 Deduction: $45,000 (100%)

Cash Savings on Purchase: $15,750

(Assuming 35% tax bracket: $45,000 x .35)

Effective Cost of Equipment After Tax Savings: $29,250

Resources

Information cited above was taken from www.Section179.Org. Consult with a tax professional concerning your specific situation.

Educational videos about OCT machines: www.optovue.com/videos

ROB Video: Paul Klein, OD, explainshow to incorporatean OCT into an eye wellness examination:

Related ROB Articles

Digital Retinal Imaging: Practice-Building Investment

EyeMed Vision Care Adds Retinal Imaging Benefit

Medical Opportunity in Optometric Practice

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