Tax Effects of the OBBB Act for Medical Practices
On July 4, 2025, the OBBB Act included significant tax relief for medical practice owners – both big and small.
If you’ve been holding off on buying a new MRI machine or opening a medical practice, this article will shed some light on how you can take advantage of these new tax law changes.
100% Bonus Depreciation Is Reinstated
One of the biggest wins for the for-profit healthcare industry is the reinstatement of 100% bonus depreciation1. For eligible equipment placed in service after January 19, 2025, you can now deduct its full cost in one tax year.
- Whatever it may be, an MRI machine, surgical robots, diagnostic imaging, or office chairs, you no longer have to spread deductions over multiple years.
Benefits for Small Medical Practices: Section 179
Small and medium-sized practices received additional benefits with Section 179. For the 2025 tax year (tax years beginning after December 31, 2024), the deduction limit was increased to $2.5 million3, with a phase-out threshold starting at $4 million.
Why use Section 179?
Section 179 is a go-to strategy for managing both federal and state tax liabilities because of its flexibility at the state-level compared to bonus depreciation.
Section 179 Benefits:
- Flexibility: Unlike bonus deduction, Section 179 allows you to pick and choose what pieces of equipment you want to expense.
- Income Targets: This is crucial for businesses that need to hit specific taxable income targets or avoid creating a Net Operating Loss (NOL), which Section 179 can’t do.
Why This Matters
This newly passed act made a big impact in the healthcare industry, specifically for medical practice owners. These changes don’t just affect big corporations, but opened up money saving opportunities for smaller businesses as well.
If you’re interested in taking full advantage of these changes, contact a Certified Medical CPA today.
Resources
1 https://www.irs.gov/newsroom/additional-first-year-depreciation-deduction-bonus-faq