Financing Types

Section 179 Financing

Pair your ultrasound equipment purchase with Section 179 to deduct the full cost in year one. Finance the equipment and keep your cash.

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Section 179 of the Internal Revenue Code lets businesses deduct the full purchase price of qualifying equipment placed in service during the tax year, rather than depreciating it over five or seven years under MACRS. The deduction limit as of the 2023 tax year was $1,160,000, with a phase-out beginning at $2,890,000 in total eligible purchases. Ultrasound systems are tangible business property used in a clinical setting, and they typically qualify. The financing piece of this is what makes the strategy particularly compelling: you can take the full deduction this year while spreading the cash outlay across a 36, 48, or 60-month payment schedule.

That combination, full deduction now and payments later, is the core reason practices time major equipment purchases around their fiscal year-end and structure the deal through financing rather than cash purchase. Your tax advisor should confirm the deduction treatment for your specific situation, but the mechanics are well-established and widely used across the medical equipment sector.

Clear answers

Questions About Section 179 Financing

Review the common timing, documentation, and equipment questions before sending the quote.

Does the equipment have to be paid in full before year-end to claim Section 179?

No. The equipment must be placed in service (delivered, installed, and operational) before the end of the tax year. It does not need to be paid off. Financed equipment placed in service before December 31 qualifies for that year's deduction even if payments continue into the following year and beyond.

Can I take the Section 179 deduction on a lease?

It depends on the lease structure. A $1 buyout lease is typically treated as a purchase for tax purposes, allowing Section 179 treatment. A fair market value operating lease generally does not qualify for Section 179 because the lessee is not considered the owner for tax purposes. Confirm with your accountant before structuring the deal.

What is the Section 179 deduction limit for 2023 and 2024?

For tax year 2023, the Section 179 deduction limit was $1,160,000, with a phase-out starting at $2,890,000 in total eligible purchases. Limits adjust for inflation annually. For the current year's limits, check IRS.gov or ask your tax advisor.

Is a refurbished ultrasound system eligible for Section 179?

Yes. Used and refurbished equipment qualifies for Section 179 as long as it is new to your practice (you have not previously claimed a depreciation deduction on that specific asset) and it is placed in service during the qualifying tax year.

Can a startup practice claim Section 179?

Section 179 cannot create or increase a tax loss; it is limited to your business's net income. A startup with a net loss in the first year may not get the full benefit of the deduction in that year, though any unused deduction can be carried forward. More established practices with clear taxable income get the most immediate benefit.

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