A Dental CPA Explains the Difference Between Expendable and Non-Expendable Items

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Capital ItemsA dental CPA from Reliance Consulting, LLC, can help you and your office staff differentiate between expendable and non-expendable equipment within your dental practice. One very basic way to look at it is this: If you throw it away after use, it is expendable. If you clean it and use it again after use, it is non-expendable.

Why is this important, and what does your dental CPA have to do with it? The distinction is very important from a tax planning standpoint since expendable items are generally deducted right away but non-expendable items (capital assets) cannot be deducted in the year of purchase. Instead, they are depreciated over the useful life through the method of depreciation.   Understanding the expense and capitalization rules will allow you to better plan your cash flows vis-à-vis taxes. Budgeting for taxes is crucial to accurately forecast cash flows of a practice. At times the government has special incentive plans to accelerate depreciation on certain non expendable assets and planning your purchases during those periods can add significant tax arbitrage benefits, especially if the assets can be financed.

For more information about how expendable and non-expendable items affect your tax return and the bottom line, contact Reliance today. We want to be your dental CPA, and with nearly three decades of experience helping healthcare professionals find profitability, you’ll want us to be, too.

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