Somewhere between now and December 31, a rep is going to tell you that if you buy before year end you can write the whole thing off. That part is true. It is also not a reason to buy anything.
Q4 is when equipment gets sold, and the deduction is the closing line. It works because it sounds like the government is paying for part of your scanner. The government is paying for part of your scanner. It is just a much smaller part than the pitch implies.
A deduction is not a discount
Say you buy $100,000 of equipment and deduct all of it this year. At a combined federal and state marginal rate of roughly 40%, you save about $40,000 in tax. That means $60,000 of your money left the practice and is not coming back.
If the equipment produces, that is a fine trade. You spent $60,000 net on something that generates revenue for the next seven years. If it sits in the corner because your team never fully adopted it, you spent $60,000 to avoid $40,000 in tax, and you are worse off by the difference.
Nobody buys equipment they expect to ignore. But I have walked through enough practice balance sheets to know that the second scenario happens more than owners admit, and it almost always traces back to a December decision made on the tax angle instead of the production angle.
What the rules actually say
For 2026, the Section 179 expensing limit is $2,560,000, phasing out once you place more than $4,090,000 of qualifying property in service.1 One hundred percent bonus depreciation is back and permanent for property acquired and placed in service after January 19, 2025.2 For a practice buying a few hundred thousand dollars of equipment, both of those ceilings are irrelevant. You will not come close.
The difference that does matter is how each one behaves. Section 179 cannot create or increase a loss. It is capped at your taxable income from active business, and anything disallowed carries forward. Bonus depreciation has no such limit and can push you into a loss. That distinction decides which one your accountant reaches for, and it is one of several reasons this decision belongs in a conversation with them rather than with the person selling the equipment.
Placed in service is the phrase that trips people up. The equipment has to be installed and ready for its intended use by December 31, not ordered, not paid for, not sitting in a crate in the hallway.3 A December 20 purchase with a January install is a next-year deduction.
The questions that come before the tax question
Does this increase what the practice can produce, or does it replace something that is failing? Those are the two good reasons to buy. Everything else is a maybe.
If it increases capacity, is there demand waiting for that capacity? New equipment that lets you do a procedure you have been referring out only pays if the referrals were real and the patients come back to you. Run the number of cases per month you actually expect, times the fee, minus what it costs to deliver, and see how long it takes to cover $100,000. If that math only works at a volume you have never hit, the answer is no, and no deduction fixes it.
If it replaces something failing, the question is simpler. What does the downtime cost when the old one quits in the middle of a Tuesday? That number is usually bigger than owners estimate, and it is the best argument for buying before you are forced to.
The third question is whether your team will use it. Adoption is where equipment ROI goes to die. If the new system changes how three people do their jobs and nobody has budgeted time for training, the purchase is premature regardless of what the tax savings look like.
Financing changes the shape of the problem
Most practices finance equipment, and that creates a mismatch worth understanding. You deduct the full cost this year. You pay for it over the next five. Years two through five bring payments with no corresponding deduction, which is a cash flow problem rather than a tax problem.
That is not an argument against financing. Spreading the cost while taking the deduction up front is often the right structure. It is an argument for looking at the payment schedule next to your projected collections instead of looking only at the first year tax savings.
Sometimes the right answer is to buy it in January
If this year's income is down and next year looks stronger, the deduction is worth more next year. A $100,000 deduction at a 32% effective rate saves $32,000. The same deduction at 40% saves $40,000. Waiting six weeks can be worth real money, and the equipment does not care which side of December 31 it arrives on.
The reverse is also true. If this was your best year and next year looks softer, accelerating makes sense. The point is that the decision depends on where your income is heading, which means it should be made with your numbers in front of you, not in response to a deadline someone else set.
Three things that bite later
Not every state follows the federal rules on bonus depreciation. Some require you to add it back and depreciate over a longer schedule, so the state benefit arrives slowly or not at all. Your accountant knows your state's treatment. The rep usually does not.
Accelerated deductions reduce qualified business income, which can shrink your QBI deduction. The interaction is not always unfavorable, but it is real and it is easy to miss when you are only looking at the top line savings.
If business use of the equipment drops below half, or you sell it or the practice sooner than planned, some of the deduction comes back as recapture. Owners who expense aggressively and then sell within a few years are frequently surprised by this at closing.
The same dollar has somewhere else to be
This is the part that gets left out of the equipment conversation entirely. The $60,000 that stayed in the equipment is $60,000 that did not go into your retirement plan, did not pay down practice debt, and did not go into the account that exists outside the practice.
Practice owners tend to hold most of their net worth inside the business, and every piece of equipment adds to that concentration. There is a point where the better use of the money is building something that does not depend on the practice continuing to run well. Where that point sits depends on your balance sheet, your timeline, and how much you have outside the building.
None of that means skip the equipment. It means the equipment decision and the personal wealth decision are the same decision, and most owners make them in separate rooms with separate people.
Before you sign
Write down what the equipment will produce, what it costs net of tax, and what the payments do to cash flow in years two through five. Ask your accountant which year the deduction is worth more and how your state treats it. Then decide.
If you are weighing a purchase this quarter and want a second set of eyes on how it fits the rest of the picture, let's talk.
References
1. Section 179 dollar limit and phase-out threshold for tax year 2026 per Rev. Proc. 2025-32. See Internal Revenue Service, Publication 946, How To Depreciate Property and the IRS annual inflation adjustment release.
2. Additional first year (bonus) depreciation under IRC Section 168(k), as modified by the One Big Beautiful Bill Act. Internal Revenue Service, Additional First Year Depreciation Deduction (Bonus) FAQ
3. Placed in service requirements, Internal Revenue Service, Publication 946
Disclosures
This material is educational and general in nature. Tax rules, dollar limits, and state treatment change and depend on the specific facts of your business. The tax rates used in the examples are illustrative and are not a projection of your result. Nothing here is tax or legal advice. Coordinate any equipment purchase or depreciation election with your tax professional before acting.