With the end of 2018 less than four weeks away, now is the time to wrap up any loose ends before starting anew.  Thanks to Congress, small businesses can file for Section 179 to aid in tax exemptions, off putting business costs incurred throughout the year.

What is Section 179? 

Section 179 is an IRS tax code that allows small businesses to deduct the full purchase price of qualifying items from their gross income that have been purchased or leased. The incentive was created so small businesses could invest in themselves by obtaining the tools needed.

Initially, small businesses could claim tax exemption up to $25,000 of new and used equipment and off-the-shelf software used in an office. In December 2015, the House and the Senate signed the 'Protecting Americans from Tax Hikes Act' (PATH Act) into law. Since the act passed, the deduction limit has been raised to $500,000 and must be used by the last day of each year.

Does MacPractice qualify Section 179? 

The short answer to this question is, yes. If your office purchased, or purchases, MacPractice in the 2018 year, any fee associated with the software will qualify for the Section 179 tax exemption. The section specifically states that "any 'off-the-shelf' computer software that (a) is not custom designed, and (b) is available to the general public is qualified for the Section 179 Deduction in the year that you put the software into service." Other items that qualify for the deduction are:

  • Any equipment (machines) purchased for your business 
  • Computers
  • Vehicles used for business purposes (that do not exceed 6,000 lbs) 
  • Furniture 

If your office purchases MacPractice software before December 31 of 2018, the software will qualify for a tax exemption.

How much can I save? 

Depending on how much your office is looking to claim for exemption, will determine your savings. Section179.org uses an example that has an initial amount of $650,000 to show the break down in numbers. Several sites also offer calculators specifically geared toward Section 179 savings.

If your office is considering purchasing MacPractice, or if your office already has it, consider using Section 179 to help save your office money in 2018. For more information about how use and apply for Section 179, visit section179.org.