IRS Section 179
Updated: 9/2022
NOTE: The information on this page applies to all Section 179-qualifying pharmacy automation equipment sold by RxSafe. However, we have tailored the examples for RapidPakRx, our adherence strip packaging system. Click here for examples pertaining to the RxSafe 1800, our secure storage and inventory management system.
The Section 179 tax deduction has helped small businesses offset the cost of capital equipment for years. The dysfunction in Congress has frequently caused the statutory purchase limit to seesaw until just before year-end. But, the good news is the IRS Section 179 purchase price limit of $500,000 was made permanent law in 2016 with the passage of the PATH act.
In 2017 the deduction limit for Section 179 increased to $1 million for 2018 and beyond. The limit on equipment purchases increased to $2.5 million.
Furthermore, the bonus depreciation is:
- 100%
- Retroactive to September 27, 2017
- Good through the year 2022
- Includes used equipment
After calculating your potential Section 179 savings below, call us today at (877) 469-2095 or fill out the form to the right. We’d love to learn more about your pharmacy and let you know the many ways the RapidPakRx can increase your profitability.
Peter Davison explains how Section 179 can enable you to depreciate the entire cost of your RapidPakRx in its first year of service, saving up to $64,750. Peter and his team at Advantage Financial Services have been working with RxSafe and independent pharmacy owners since 2012.
What is Section 179?
Section179.org does a great job keeping small business owners up-to-date, and cites the following major benefits to this deduction:
- Section 179 is a tax code created to help businesses. By allowing businesses to deduct the full amount of the purchase price of equipment (up to certain limits), Section 179 is a fantastic incentive for businesses to purchase, finance or lease equipment this year.
- Section 179 is valid on most types of equipment. There is little sense in allowing a deduction on only obscure equipment, so Section 179 is aimed at general business equipment as well as off-the-shelf software. If you use it in your business, it probably qualifies. See a list of qualifying Section 179 equipment.
- Section 179 can greatly help your bottom line. By deducting the full cost, you lower the amount you pay for equipment and/or software substantially. And these benefits can be further expanded if you choose to lease or finance your equipment & software.
- Section 179 is simple to use. All you need to do is buy (or lease) the equipment, and use a special IRS form. That’s it. Details here.
- Section 179 enhancements typically expire at year’s end. The various Stimulus Acts over the past few years have included special provisions for Section 179 and Bonus Depreciation, and greatly increased the limits on how much businesses could deduct. But the enhancements usually expire at the end of the year.
- There is simply no better time than now to take advantage of Section 179 and Bonus Depreciation. Why? Because it is a Use-It-or-Lose-It write-off that ends December 31st.
How does Section 179 help pharmacy owners?
Purchasing a strip packager is a significant cash outlay for most pharmacies. Regardless of the ultimate return on investment, the immediate purchase decision has to take the business’ cash position into account. Taking the section 179 deduction is a huge help, and can significantly discount the purchase price of pharmacy automation equipment. Use RxSafe’s handy calculator below to figure out the hard savings available through this program.
Check with your accountant on what options are available to you to take advantage of this program. You can reach out to RxSafe directly at 877-469-2095 or fill out the form to the right above.
Pharmacists Bruce and Lisa Kocian, owners of Gibson Pharmacy in Athens, Texas, explain how Section 179 helped their pharmacy save money after investing in an RapidPakRx.
Section 179: Tax Deduction Calculator
The calculator presents a potential tax scenario based on typical assumptions that may not apply to your business. This page and calculator are not tax advice. The indicated tax treatment applies only to transactions deemed to reflect a purchase of the equipment or a capitalized lease purchase transaction. Please consult your tax advisor to determine the tax ramifications of acquiring equipment or software for your business.