This post is for informational purposes only and is not intended to offer tax or financial advice. The specifics of Section 179 and its application can vary based on your healthcare organization's unique situation. You should always consult with your tax advisor to determine your eligibility and to ensure you are taking the most strategic approach for your business.
For most healthcare administrators or decision-makers, the primary focus is on offering the highest quality of care to your patients. Higher levels of care can require upgrading and replacing medical equipment and technology. The challenge for administrators, however, is balancing these essential upgrades with budget. Fortunately, the Section 179 tax deduction is a powerful tool that can help healthcare organizations do just that.
With the end of the year approaching, now is the time to understand how this tax incentive can help healthcare facilities acquire the assets they need while significantly reducing their tax burden.
What is the Section 179 tax deduction?
Section 179 of the IRS tax code allows businesses, including healthcare facilities, to deduct the full purchase price of qualifying equipment and software acquired or financed during the tax year. Instead of depreciating the cost of an asset over several years, this deduction allows organizations to expense the entire amount in the year the asset is placed into service. This can provide an immediate and substantial tax benefit, freeing up cash flow to be reinvested into staffing and delivery of care.
How Section 179 Benefits Healthcare Facilities
For healthcare organizations, Section 179 is more than just a tax break – it is a strategic opportunity to improve patient care and operational efficiency. By leveraging this deduction, healthcare organizations can offset the cost of major tangible purchases such as:
- Diagnostic Machines: High-tech equipment like ultrasounds, electrocardiogram (EKG) machines, and spirometry devices.
- Imaging Equipment: Investing in new X-ray machines, C-arms, or even advanced MRI and CT scanners (up to the deduction limit) can provide clearer images and more accurate diagnoses.
- Patient Monitoring Systems: Devices used for tracking vital signs, cardiac monitoring, and other patient data, whether in a hospital or an ambulatory setting.
- Surgical and Examination Tools: From new surgical lasers and endoscopy equipment to basic exam tables and physical therapy devices.
- Office Technology: Computers, servers, printers, and "off-the-shelf" software used for electronic health records (EHRs), billing, and practice management.
- Office Furniture and Fixtures: Desks, chairs, and other furniture for your waiting rooms, offices, and consultation rooms.
2025 Section 179 Deduction Limits and Key Requirements
To take full advantage of Section 179 incentives it is important to be aware of current standard limits and rules. The 2025 limits are:**
- Maximum Deduction: For the 2025 tax year, healthcare organizations can deduct up to 2,500,000.
- Spending Cap: The deduction begins to phase out on a dollar-for-dollar basis once an organizations total equipment purchases exceed $4,000,000. This makes Section 179 a powerful tool specifically designed for small to mid-sized practices and facilities.
- Eligibility: The equipment must be tangible personal property and must be used for healthcare purposes more than 50% of the time. The asset can be new or used, as long as it is new to the healthcare facility.
- Bonus Depreciation: The bonus depreciation for qualified healthcare equipment acquired and placed into service after January 19, 2025, is 100%
** https://dhjj.com/bonus-depreciation-section-179-2025
The Year-End Deadline is Critical
The most important rule to remember is that qualifying equipment must be purchased and placed into service by December 31, 2025. This means the equipment must be not only delivered, but also fully installed and operational before the end of the calendar year.
Real-World Scenarios: Putting the Deduction into Action
Reading about and understanding Section 179 standards and limits is one thing, seeing the deduction in action is another. Here are two examples showing how Section 179 can benefit healthcare facilities.
The Primary Practitioner's Upgrade A private practice physician decides to buy a new, advanced ultrasound machine for $80,000. With Section 179, they can deduct the full $80,000 from their practice's taxable income in the first year. Assuming a 30% tax bracket, this could result in tax savings of $24,000, drastically reducing the net cost of the equipment and boosting the practice's immediate cash flow.
The Expanding Orthopedic Clinic A growing orthopedic clinic invests $1.5 million in new equipment for a satellite office, including a digital X-ray machine, new exam tables, and updated patient rehabilitation equipment. Since their total equipment spending is well under the $4,000,000 cap, they can use the Section 179 deduction to write off the entire $1.5 million from their taxable income, providing a massive first-year tax benefit.
Planning Medical Equipment Acquisition
Taking advantage of the opportunity to reduce tax liability and invest in the future of a healthcare organization begins by proactively and intentionally planning healthcare equipment purchases. In this way healthcare organizations can acquire the assets needed to elevate patient care and improve operations, while also setting the stage to reduce tax liability and reallocate capital back into the organization.
Review capital equipment needs, operational goals, and partner with a healthcare equipment distributor to acquire qualifying equipment and ensure it can be delivered and placed in service before the year-end deadline.
Partner with CME Corp. for Eligible Section 179 Healthcare Equipment
As the United States’ largest specialty distributor solely focused on equipment used in healthcare, we have built long term relationships with industry leading manufacturers and can help healthcare organizations acquire healthcare equipment that qualifies for Section 179 tax incentives.
Our expert account managers will work with you and the manufacturers’ representatives to help your healthcare organization choose and acquire medical equipment tailored to the needs of the patient population, staff, available space, and budget.
Complementing CME’s expert focus on equipment used in healthcare are design and CAD, project management, direct-to-site delivery, and biomedical services. We are the only medical equipment distributor nationwide, able to say we are truly a one-stop shop.
Direct-To-Site Logistics and Delivery Services
In addition to delivering medical equipment fully assembled, to the service location, when it is convenient for staff, our in-house Direct-to-Site services teams will install equipment, such as wall-mounted diagnostic systems, so they are ready for immediate use.
Biomedical Services
In-house Biomedical Equipment Technicians (BMETs) can support facility biomed teams by performing scheduled annual preventive maintenance on qualifying Section 179 medical equipment.
Click CHAT to start the conversation about Section 179 approved healthcare equipment
Find your account manager and learn how CME can help you take advantage of Section 179 tax deductions.
About CME: CME Corp is the nation’s premier source for healthcare equipment, turnkey logistics, and biomedical services, representing 2 million+ products from more than 2,000 manufacturers. With two corporate offices and 35+ service centers, our mission is to help healthcare facilities nationwide reduce the cost of the equipment they purchase, make their equipment specification, delivery, installation, and maintenance processes more efficient, and help them seamlessly launch, renovate and expand on schedule.
