Practice owners: Don’t leave money lying on the table

Practice owners: Don’t leave money lying on the table

New legislation could help veterinary hospitals pay for equipment and leasehold improvements before Dec. 31.
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Dec 24, 2014
By dvm360.com staff

Calm down! It’s months from Tax Day! But we just wanted to let you know about work by Congress that could benefit veterinary practices and other businesses nationwide—the Tax Increase Prevention Act of 2014.

The law could offer tax expensing and eduction to practice owners for purchases made by the end of the year as well as qualified leasehold improvements. The so-called “tax extenders” in the package most likely to apply to veterinary hospitals are:

> Bonus depreciation. The new law allows taxpayers to claim an additional first-year depreciation deduction: a 50 percent bonus depreciation through 2014. Check with your accountant on what’s covered and what that might mean for any purchases you’ve made this year or plan to make in the next week.

> Code Sec. 179 expensing. Sounds forbidding, but the concept is simple. The new tax extender boosts the amount of qualified assets you can expense—increasing from $25,000 per item and a $200,000 limit to $500,000 per item and a $2 million limit. That’s what you can deduct as immediate expenses, rather than needing to capitalize and depreciate those purchases. Again, check with your tax guru on what qualifies.

> Code Sec. 179 for qualified leasehold improvements. You may be able to treat some of these as Code Sec. 179 property, but with a lower dollar cap of $250,000 (instead of $2 million).

Remember, before making any big decisions to take advantage of these timely but short-lived tax extenders for 2014, check with your accountant.