It’s important to understand that not every business purchase qualifies for the Section 179 deduction. The assets that may qualify for the Section 179 tax deduction include business equipment, office furniture, computers, software, and technology that are purchased during the business year. Any packaging equipment and software you purchase for use in your pharmacy qualifies for the tax deduction, as long you put them into use during the business year in which they are acquired.
Deducting financing costs of equipment
Not every company will have the cash available to purchase new equipment. If you are in this position, don’t despair. If you choose to finance your equipment purchase, you can still benefit from Section 179. This is true whether you finance your purchase with a line of credit, vendor financing, or credit card. If you use financing with interest, you can deduct the interest payment. Your tax advisor can help you determine the best type of financing for your company’s tax situation.
For example, if you buy a machine in December that costs $20,000, you can put down $4,000 in cash and finance 80% of it by charging it to a business credit card. You wouldn’t have to pay the credit card bill until January of the following year, but you’ll qualify for Section 179 as long as you start to use the machine in your business before the end of December. If you report on the cash method of accounting, you can deduct the full price in the purchase year, even though you put 80% of the purchase price on the credit card and only had $4,000 out of pocket that year.
What does this mean for independent pharmacy owners?
If you’re an independent pharmacy owner, IRC Section 179 makes purchasing packaging equipment within reach by offering substantial tax savings. This can be a good incentive for immediately investing in a pouch packaging system and lowering taxes owed for the year.
And it benefits you, as strip pouch packaging is a highly demanded service in the industry. You can set yourself apart from the competition by offering this valuable service. Upgrading your packaging service can also help you increase your business overall. For instance, you could market your pharmacy to long-term care facilities.
By upgrading or investing in packaging equipment, you might realize the value in other areas as well. You could save on your labor costs by having packaging machines do the work. Another thing to consider: Outdated medical equipment costs pharmacies more in medication errors, product waste, and decreasing net profits. Newer systems can help improve errors and product waste while streamlining your workflow processes.
When you purchase packaging equipment from Noritsu, you end up with extremely reliable equipment and compatible software. You also partner with a company that understands the need for tailored solutions to your unique needs. Since no two pharmacies are exactly alike, Noritsu provides solutions that will be customized to your business model and clientele.
Noritsu has the experience to work with your independent pharmacy and create an efficient, integrated packaging system that maximizes labor and increases your competitiveness. With reliable, efficient, and versatile equipment, your pharmacy can stay focused on your customers instead of pharmacy operations. You can feel confident that your equipment can meet the changing needs of the pharmacy market.
Contact Noritsu today to learn more about how automated packaging equipment can benefit your pharmacy. And, for additional questions about Section 179, be sure to contact your tax professional.