 2010 Tax Deduction Benefits
Take advantage of this unique opportunity
New tax laws designed to stimulate economic growth have made 2010 the best time in years to buy EMR software. Medical practices can realize huge tax savings if they purchase their EMR software in 2010.
Tax Deduction Limits Increased to $250,000
Under the Economic Stimulus Act of 2008, the deduction limits for all qualified purchases made in 2008 was increased from $128,000 to $250,000. The 'Hiring Incentives to Restore Employment Act' of 2010 passed on a bipartisan Senate vote of 68-29 extending the enhanced Section 179 deductions of 2008 / 2009 into 2010. This allows medical practices to expense the full cost (up to $250,000) of their EMR and computer equipment that is purchased by Dec. 31st, 2010, rather than depreciating it by a set percentage over a period of years. The deduction limit is being lowered to $25,000 in 2011.
Example: If your practice’s taxable income is $100,000 prior to your purchase, and you purchase software and hardware for $75,000, you just reduced your taxable income to $25,000.
In addition, you still qualify to receive the Economic Stimulus bonus of $44,000 to $63,750 per eligible provider from Medicare or Medicaid.
EMR Software is Qualified
Only certain types of equipment qualify for the deduction, but off-the-shelf computer software, such as Abraxas EMR and Abraxas PM software products are considered eligible for the tax deduction, provided you purchase and install the software between January 1st and December 31st, 2010.
Purchased, Leased or Financed…Qualified
Section 179 applies to equipment both purchased and leased during 2010. In fact, if leased, the money you save through these deductions can actually exceed your lease payments for the year. With a non-tax capital lease, you can buy EMR & practice management software and write off up to $250,000 of equipment for 2010, without actually spending $250,000 in 2010. Even if you obtain a loan for your electronic medical records system using an Equipment Finance Agreement (EFA), you can still take the Section 179 tax deduction.
Does it sound too good to be true?
It may. But it is true. To confirm, please consult with your tax advisor.
You can also go to:www.section179.org.
Will it be extended beyond 2010?
The deduction limit is scheduled to be lowered to $25,000 in 2011. There is no guarantee the legislation will be renewed in 2011 and beyond. So, if you're considering purchasing software to fulfill the government mandate for EHR or simply to increase your efficiency, this year might just be the best time to do it.
How can Abraxas Help?
Abraxas can help you maximize your tax deduction for your software and hardware purchase, if you act now. To take advantage of the section 179 of the IRS Tax Code, described above, your purchase needs to be finalized in 2010.
In addition, we can help you receive your e-prescription bonus and stimulus incentive of $44,000 to $63,750 per eligible provider. Call us now: (877) 777-6500.
This information is only a brief summary of the tax code and is not exhaustive. Make sure you consult a tax professional to see if your practice qualifies before taking any action.
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