Of all the tax deductions that benefit skin care professionals and business owners in general – perhaps none are more beneficial than IRS Section 179. Created for business owners, its primary purpose is to encourage spending and motivate the economy.
New and used equipment, as well as off-the-shelf software up to $1,040,000 actively used in 2020 and utilized 50-percent of the time qualify under the code. This allows business owners to accelerate the depreciation on an asset and reduce taxable business income all the way to $0.
What this Means for Skin Care Professionals
From now till December 31, 2020, aesthetics industry business owners can acquire pre-owned aesthetic lasers and devices and write it off at 100-percent deduction. Keep in mind – this taxable business income can be reduced to $0 – not beyond where the business owner would receive a refund.
Synergy MedSales Q4 Tax Incentive Inventory and Recommendations
We’re asked this question a lot, “If you were opening a med spa tomorrow, which devices would you start with?”
Here are a few recommendations and the actual impact on a 2020 tax return.
- 2018 BTL Emsculpt Bodysculpting Device, asking price is $85,000 which means if an owner owes $85,000 to the IRS on their 2020 tax return then they would owe only $0.
- 2019 InMode RF w/Morpheus8 BodyFX Forma Plus Fractora on sale for $79,000 which means if an owner owes $100,000 to the IRS on their 2020 tax return then they would owe only $21,000.
Years ago, the Section 179 deduction was facetiously referred to as the “Hummer Tax Loophole,” because people were using it to buy GMC Hummer SUVs. But the IRS doesn’t allow loopholes to last for long. However, Section 179 is still extremely advantageous for business owners and perhaps no industry can benefit more than skin care.
If you have questions about how you can take advantage of IRS Section 179, email here or dial 310-272-5824.