Upgrading your hospital with new information technology or veterinary equipment really is one of the best investments you can make. And thanks to the American Taxpayer Relief Act of 2012, better known as the "Fiscal Crisis Bill," upgrading with new equipment can be more economical, too.

Under the new law, the IRS Section 179 equipment deduction limits were raised for both the 2012 and 2013 tax years. (The deduction for 2012 needs to be taken retroactively as it was not enacted until after the end of the tax year. If you qualified for deductions in 2012, speak with your tax advisor about applying for the new, larger deductions now available for that year.)

With this monetary incentive from the government, it now can cost you less in actual dollars to purchase the new technology you need to keep your practice current with state-of-the-art services for your clients.

Here are the new deduction limits at a glance:

Section 179 Feature



Deduction Limit


-         Up from $139,000 in 2012 prior to the new legislation

Limit on Capital Purchases


-         Total cost of equipment that can be deducted under Section 179

-         Up from $560,000 in 2012 prior to new legislation

Bonus Depreciation


-         Usually taken after Deduction Limit is reached

-         Only for new equipment placed in service during 2012 or 2013

Property qualifying for the Section 179 deduction includes:

  • Equipment (machines, etc.) purchased for business use
  • Tangible personal property used in business such as computers, office furniture, and office equipment
  • Certain off-the-shelf business software
  • Property attached to your building that is not a structural component (such as counters and signs)

Under the law, you can purchase new equipment this year, place it in service before December 31, 2013, and significantly write off the cost of that equipment--even if no payments are made until 2014.

Here's a sample Section 179 deduction for the 2013 tax year:

2013 Equipment Purchases:


First Year Write Off:

$500,000 is the maximum in 2013



50% Bonus First Year Depreciation:

On remaining value ($625,000 - $500,000 = $125,000 x 50%)



Normal First Year Depreciation:  




Total First Year Deduction:

$500,000 + $62,500 + 12,500



Cash Savings on Purchase:

$587,500 x 35% tax rate



Equipment Cost after Tax:

$625,000 less tax savings of $201,250



*Calculations represent a potential tax scenario based on assumptions that may not apply to your practice.

Before planning an equipment purchase or practice upgrade, talk to us at Wells Fargo Practice Finance about our customized equipment financing packages. As an AAHA member, you automatically qualify for preferred rates on competitive fixed-rate loans, as well as our complimentary Project Planner, with guidelines to help you manage your veterinary practice upgrade. You can also visit our online loan calculator to determine monthly payments based on your loan amount.

To learn more about equipment financing and Section 179, just call your Wells Fargo Practice Finance specialist at 1-866-4MY-PAWS (1-866-469-7297) or visit us at


Consult your tax advisor and/or accountant for a statement of tax and accounting rules applicable to your particular situation and for all other tax and accounting advice.
All financing is subject to credit approval.
©2013 Wells Fargo Bank, N.A. All rights reserved. Wells Fargo Practice Finance is a division of Wells Fargo Bank, N.A. 

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