Q: I'm thinking about purchasing some dental equipment for my practice. Other than the equipment itself, what costs do I need
to be aware of?
Perform a cost-benefit analysis before purchasing any equipment, says Dr. Karl Salzsieder, JD, a Veterinary Economics Editorial Advisory Board member and consultant with Salzsieder Consulting and Legal Services in Longview, Wash. First, determine
how often you'll use the equipment. The higher the usage, the less you can charge clients per procedure. Other costs to consider
include financing, a warranty, and maintenance costs. In addition to these hard costs, you'll need to account for depreciation,
funding for replacement, and costs for training team members. You should also calculate at least a 15 percent return on investment
after all costs.
If that seems financially overwhelming, don't fret. One deduction to the total cost is the IRS Section 179 tax benefit for
purchasing equipment. Essentially, Section 179 of the IRS tax code allows businesses to deduct the full price of qualifying
equipment purchased or financed during the tax year, regardless of the normal equipment useful life. For example, if the owner
is in the 30 percent to 35 percent tax bracket and the purchase is for $10,000 worth of equipment, the purchase would save
over $3,000 in income tax.