North Texas Dentistry Volume 8 Issue 5 2018 ISSUE 5 DE | Page 18

money matters
$
Year-End
Purchasing
and the Big
Tax Benefits
by Catherine Lightfoot
s we come to the close of the year, it seems most
practice owners engage in, or at least consider, some
sort of equipment purchase before December 31st.
The dental equipment representatives tell me the
last quarter is their busiest time of the year and that
the last month is insane. Why does everyone need assets in
December, or do they? It is true that the tax depreciation rules
have been favorable for many years. The latest Tax Cuts and Jobs
Act just made them even better.
A
These are the two questions I want to explore and explain. Do
you need to purchase before year end? If you do, what are the
tax benefits? Timing is key. The IRS requires the item to be
“placed in service” in order to get the tax break. This means it
needs to be delivered and functioning by December 31st!
in a few pieces that have been around for a while with something
a little trendier.
Now to the clinical area. This is where the action is! The first ques-
tion to ask is, are you making as much money as you can? Do you
only have one of something and now it is time to get two or maybe
even one for everyone in the clinic? Maybe it is time to build out
that extra operatory room? How would you know? There are
benchmarks you can check to guide you on these decisions. Own-
ers often have a feel for this based on the schedule. Sometimes a
strategic look at the numbers helps make the decision.
Do I need to buy? Then there is the obvious. The big equipment: the cone beams,
the CAD/CAM, the scanning technology. Do you have to get one
just because your competitor has one? Here is the way it works.
I will never talk a dentist out of buying a piece of equipment, if
they can prove the equipment will help them make money.
Start in the patient waiting area. Does it look inviting or dated?
Are the seat cushions worn? Are the pictures faded? I am not
suggesting a complete remodel. However, you may want to trade Good debt is for something that will either appreciate in value
or make you money. The trip to Italy is bad debt, you pay for that
with cash. The vehicle you buy that loses value the moment you
drive out of the dealership, bad debt, you pay for that with cash.
The cone beam that will allow you to charge $X per use when
you are currently referring out X patients per month, makes a
First, we need to eliminate the want from the need. There is
obviously a difference. The tax benefit is real. However, you will
never be a financial success if you continue to buy things you do
not need. So, how do we determine what we need? Let’s take a
walk through your practice.
18 NORTH TEXAS DENTISTRY | www.northtexasdentistry.com
It goes back to a mantra I teach about “good debt” and
“bad debt”.