What is Section 179? Section 179 is an IRS tax code that allows business owners to write off their capital equipment purchases as a business expense – saving business owners money when it comes time to file taxes each year. This allows aesthetic laser business owners to write off the entire amount within the year it was purchased – rather than smaller amounts over the next several years.
Section 179 Tax Break Changes from 2022 to 2023:
- Cap for total amount written off increased from $1,080,000 in 2022 to $1,160,000 in 2023 (7.4% increase)
- Bonus depreciation decreased from 100% in 2022 to 80% in 2023
- 2023 Spending Cap on equipment purchases: $4,050,000
Keep reading this article to learn how to maximize your investments by understanding and taking advantage of Section 179.
What is Section 179 and How to Maximize the Benefits of Your Investment
Section 179 is a tax code that allows businesses to write off capital equipment investments. In the past, business owners buying qualifying equipment typically wrote it off a little at a time through depreciation. For example, if you purchased an $80,000 device in years prior, you’d write off $16,000 per year for five years. While any tax write-off is helpful, it’s even more fiscally beneficial to write off the entire investment of the aesthetic laser equipment in the same year it was purchased.
Does Section 179 apply to leased or financed equipment as well? Absolutely – this tax code applies to purchased, leased, and financed equipment for businesses, which is especially beneficial to entrepreneurs interested in starting a laser tattoo removal business or adding laser hair removal services to their clinic alongside other aesthetic offerings.
“It’s an incentive created by the U.S. government to encourage business owners to buy equipment and invest in themselves,” according to the official Section 179 website.
Below is an example of what your maximum benefits could be when purchasing aesthetic laser equipment for your business at $165,900:
Rules and Restrictions of Section 179
NOTE: To qualify for the Section 179 Deduction, the equipment and/or software purchased or financed must be placed into service between January 1, 2023, and December 31, 2023.
The equipment, vehicle(s), and/or software must be used for business purposes more than 50% of the time to qualify for the Section 179 Deduction. Simply multiply the cost of the equipment, vehicle(s), and/or software by the percentage of business use to arrive at the monetary amount eligible for Section 179.
Section 179 has limits – there are caps to the total amount written off ($1,160,000 for) and limits to the total amount of the equipment purchased ($2,890,000 in). The deduction begins to phase out on a dollar-for-dollar basis after $2,890,000 is spent by a given business (thus, the entire deduction goes away once $4,050,000 in purchases is reached), making it a true small and medium-sized business deduction.
Become Part of the Astanza Experience
Astanza’s in the business of transformation – changing lives together through business services, ongoing support, and advanced aesthetic laser technology. Anyone who purchases an Astanza Laser device is eligible for the Astanza Experience.
The Astanza Experience is specially crafted to support laser business owners every step of the way throughout the lifetime of their aesthetic laser business journeys. Including a 3-Business Day Service Guarantee, ensuring your laser device is back up and running within three business days or less, Lifetime Training and Clinical Support, providing support and continued laser training, and business and marketing strategies through our unique Business Builder System.
Learn more about Astanza’s extensive aesthetic laser equipment product line, the Astanza Experience, and how you can take advantage of Section 179 by contacting us today!
Editors note: This blog is strictly informational and designed as a guide to help educate entrepreneurs and future business owners to understand Section 179 and maximize their investments. This is not professional financial or tax advice.