Never too soon for tax strategies

Nov. 1, 2011
Soon we will be celebrating the start of 2012. Economically, this year we have watched and waited to see if the economy would recover ...

Justin Moody, DDS

For more on this topic, go to and search using the following key words: dental technology, tax strategies, dental equipment, Section 179, Justin Moody, DDS.

Soon we will be celebrating the start of 2012. Economically, this year we have watched and waited to see if the economy would recover enough to infuse people with confidence to make new purchases and make life improvements.

This year and every year, I keep improving my practice, adding technologies that lead to improved dental care for patients. We owe it to them and ourselves, not only to treat existing conditions, but to give patients choices for enhancing their smiles in the future. The challenge is to invest in new equipment, and to invest wisely, using tax incentives. For this column, I turned to my accountant for advice. Mark Mader, of Mader Tschacher Peterson & Co., LLC, in Laramie, Wyo., has been helping my finances grow for the past 10 years.

One tax incentive that I have taken advantage of several times is the Section 179 deduction. Since technology is such an integral part of my practice, being able to deduct a portion of larger equipment investments such as my i-CAT® and my GXCB-500™ has made these advancements a reality much faster.

For those who are considering adding such equipment, the time is now.

Mader notes, “This is an especially good time to use this deduction because this year the deduction limit was increased to $500,000, for a total amount of equipment not to exceed $2 million.”

The catch is that this incentive has a time limit. Businesses can take this deduction if the equipment is placed into service by Dec. 31, 2011. Thinking too long about upgrading or implementing new technology and deciding to take action next year is just not practical.

Mader says, “If you are considering new technology for next year anyway, you might want to get this in place since it ends this year.

“With all of the proposals for tax changes in Congress this year, no one knows what is going to happen next year. As we speak, President Obama plans to bring a $1.5 million tax increase to Congress today (this conversation took place in September 2011), and businesses that are doing well should probably take advantage this year. Next year, the deduction might be lower, or even nonexistent.”

Mader adds, “It’s all politics. We definitely know the tax incentives that are in effect for this year, so if you are planning to buy new technology in the next six months anyway, you might as well save some money and have the equipment working for you by the end of the year.”

Mader notes that if you estimate that your practice may be doing better next year, you can also take the 179 deduction this year and carry it forward.

“This is a very timely article,” says Mader. His accounting philosophy is that tax planning is an essential element of the tax preparation process, so by planning your overall business strategy, you can access the most current developments in the tax laws to minimize both your current and future tax liabilities, and get new technology in the process.

It is amazing how much I saved by having an accountant who knew how to apply the tax laws. Having the new digital technologies allowed me to go paperless, have better communication with my patients, and take better images for diagnosis and treatment. That’s good planning and good business.

You, too, can take your offices to a new level. Don’t hesitate. Before the end of the year, do something that will make next year a better year for your practice and your patients.

Dr. Justin Moody is a diplomate with the American Board of Oral Implantology/Implant Dentistry and the International Congress of Oral Implantologists, and an associate fellow with the American Academy of Implant Dentistry. He also holds mastership and fellow status at the Misch International Implant Institute. Reach him at [email protected].

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