One of the most effective ways for a dental practice to save money in taxes in a given year is to take advantage of the tax write-offs available for equipment depreciation. In general, there are three ways to take advantage of depreciation – take it all up front (up to a limit of $139,000 in 2012), spread it out evenly over the anticipated life of the equipment (three, five, or seven years are the standard recovery periods), or take the first year’s depreciation plus an additional 50 percent in year one.
All of these methods of depreciation have their particular benefits, and a dental CPA from Reliance Consulting, LLC, can help you decide what way is best for your practice. Keep in mind that these methods of depreciation typically only apply to new equipment. What this means is that the owner of a dental practice must weigh the tax benefits of buying new against the potential cost savings of buying used dental equipment, as well as the ramifications for asset protection. Again, a Reliance dental CPA can help you decide which path makes the most sense for you and your practice.
One other potential source of a tax write-off can be found in the dental office building. If you own the office your practice is located in, or if you operate a separate company that owns the building and leases it to the practice, ask your dental CPA from Reliance what tax advantages you might be eligible for when it comes time to plan and prepare your business tax return.
To learn more about the potential tax write-offs involved with a dental practice – both for the business and for you, individually – contact Reliance Consulting today.