What is Section 179 for medical equipment?

Section 179 covers most tangible business property used more than 50 percent in business: medical and dental equipment, computers, office furniture, software, vehicles (with limits on passenger vehicles), and qualifying leasehold improvements. For tax years beginning after Dec 31, 2024, the OBBBA (Public Law 119-21, signed July 4, 2025) set the Section 179 limit at $2.5M, with a phase-out threshold of $4M. For tax year 2026, IRS Rev. Proc. 2025-32 indexes the limits to $2,560,000 and $4,090,000 respectively. Section 179 cannot create a net loss; it is limited to taxable business income. Bonus depreciation under Section 168(k) can be combined with Section 179 to accelerate cost recovery on amounts above the limit, with bonus depreciation permanently reinstated at 100% for property acquired and placed in service after January 19, 2025 (per OBBBA). The strategic timing question is whether to take the deduction this year or spread it across years to optimize bracket management. For practices in high-rate years (above $500K of profit), front-loading typically saves more total tax. For practices anticipating higher future income, spreading can be optimal.