How does equipment purchase lower my pharmacy’s taxable income?
According to Section 179 of the United States IRS Tax Code, businesses are allowed to immediately deduct (or write off) from their taxable income the full purchase price of a qualified equipment and/or software that is purchased or financed and put into use before December 31, 2021 – the fiscal year-end for most businesses.
Can I have an example of what this looks like when I file me Corporate Income Tax Returns?
My pharmacy’s gross income is $1,000,000
My pharmacy’s cost of goods sold & operating expenses is $700,000 (purchases, office supplies, insurance, salaries, etc.)
My pharmacy’s taxable income is $300,000 (Gross Income – Cost of Goods Sold & Operating Expenses = Taxable Income)
Can I have an example of what this looks like at the equipment level with Medisca’s Taxman Sale?
On top of that – my pharmacy’s qualified equipment purchases this year totals to $50,000. According to Section 179, I can also deduct this full amount from my taxable income, bringing my taxable income down to $250,000 – You only have to pay taxes on this amount!
Is there a better time of year to purchase equipment for tax savings?
Catalog cost of Maz® KK-300SS is $17,000
Medisca’s Taxman Savings cost of Maz® KK-300SS is $15,500 plus $3,000 Medisca Credit*
Amount that can be deducted from my taxable income is $15,500 (full price can be deducted)
Tax savings based on 21% IRS Corporate Income Tax Rate is $3,255**
Total Savings of $4,775 plus $3,000 Medisca Credit with Medisca’s Taxman Savings***
The shorter the length between purchase and filing your taxes – the quicker the savings. Purchasing equipment at the end of the fiscal year means you only need to wait a few months when you file your Corporate Income Tax Returns to see the benefit.
What equipment qualifies for tax deduction?
The IRS recognizes equipment that will last more than 1 year and is used at least 50% of the time for business operations. There are some exceptions and not all equipment may qualify. It is recommended that you consult with your tax advisor for further details.
Is there a limit on how much equipment can be written off per year?
The 2021 Section 179 Deduction limit is $1,050,000 for the amount that can be written off and $2,620,000 for the total amount of the equipment purchased.
*Offer expires December 31, 2021. See product page or contact your Medisca Account Executive for more details on this promotion.
**The tax savings refers to the amount that business would save in taxes by deducing the full equipment cost from their taxable income, which is permissible according to the IRS Tax Code. Note that this is for demonstration purposes only, and should not be relied on as tax advice.
***Total savings refers to the amount that a business would save in taxes plus the amount saved with Medisca’s taxman savings sale.
The content of this webpage is for informational purposes only of a general nature and does not address the circumstances of any particular individual or entity. Nothing contained herein shall be considered financial advice and should not be relied on. You should seek independent financial and taxation advice to validate how the information contained herein relates to your unique circumstances.