Section 179 Tax Deductions: How Independent Doctors Can Save Thousands

As an independent physician, you wear multiple hats—healer, entrepreneur, and, let’s face it, part-time accountant. Navigating the complex web of taxes is one of the least glamorous parts of running your own micro-corporation. However, the Section 179 tax deduction is a golden opportunity to maximize your investments and minimize your tax liability. Let me share the story of one of my coaching clients—a rural general surgeon who also happens to be a helicopter pilot—and how he used this deduction to his advantage.

First let’s talk about section 179.

How Section 179 Works for You

Section 179 of the tax code is a remarkable opportunity for small business owners, including medical professionals who have established themselves through professional corporations, to harness financial flexibility and growth potential. This provision empowers them by permitting the deduction of the entire purchase price of qualifying equipment and property within the same year it is acquired.

Unlike traditional methods that require spreading depreciation costs over several years, Section 179 allows you to take full advantage of immediate financial relief. This upfront deduction not only alleviates tax burdens significantly but also liberates cash flow, providing more resources to reinvest in your business and fuel your entrepreneurial dreams

In 2025, this powerful tool offers a substantial deduction limit set at $1,250,000, with an overall cap on equipment purchases amounting to $3,130,000. But the benefits don't stop there—with strategic planning, you can further enhance your savings through bonus depreciation. This combination acts as a catalyst for maximizing tax advantages and pushing the boundaries of what you can achieve financially.

Section 179 Key Features

. Key features include:

• Deduction Limits: Capped at $1,250,000 for 2025

• Business Income Limitation: You can’t claim more than your taxable business income. Any unused amounts can be carried forward to future years

• Eligibility: Applies to new and used assets, as well as certain building improvements

• Flexibility: Allows you to choose which assets to expense, making it easier to target high-cost assets

To illustrate how transformative Section 179 can be, let’s explore a real-life example: Imagine Dr. Smith, who runs a thriving dental practice under a professional corporation structure. In an effort to expand services and improve patient care quality, Dr. Smith decides to invest in state-of-the-art dental chairs and diagnostic equipment totaling $1 million. By utilizing Section 179's full deduction capabilities alongside bonus depreciation provisions for any excess costs beyond initial limits or thresholds met during purchasing decisions made throughout fiscal operations annually—Dr. Smith not only reduces taxable income substantially but also strengthens her clinic's future-ready foundation—ensuring sustained success while inspiring confidence among those she serves daily

How Bonus Depreciation Works with Section 179

Bonus depreciation and Section 179 are two powerful tools that can help medical professionals and other small business owners maximize their tax savings when acquiring assets.

Bonus Depreciation

Bonus depreciation allows businesses to deduct a percentage of the cost of qualifying assets in the year they are placed in service. For 2025, the bonus depreciation rate is 40%. This means you can immediately write off 40% of the cost of eligible property, with the remaining cost depreciated over the asset's useful life. Key features include:

• Eligibility: Applies to new and used assets with a recovery period of 20 years or less, such as equipment, furniture, and certain property improvements

• Flexibility: No dollar limits on the amount of bonus depreciation that can be claimed

• Immediate Deduction: Provides significant upfront tax relief, reducing taxable income

Combining Section 179 and Bonus Depreciation

When deciding between Section 179 and bonus depreciation, consider the following:

1. Use Section 179 First: Since Section 179 is limited by your taxable income, it's often better to apply this deduction first to ensure you can fully utilize the benefit

2. Apply Bonus Depreciation Next: Bonus depreciation does not have an income limitation, so it can be applied to reduce taxable income further and potentially offset other income sources

For example, if Dr. Smith invests $1 million in new dental equipment, she can use Section 179 to deduct up to $1,250,000 of the purchase price. If the total purchase exceeds this limit, she can apply bonus depreciation to deduct 40% of the remaining costs.

The Airplane Investment: A $180,000 Tax Saving

As mentioned previously one of my clients, a skilled rural general surgeon, has a unique way of getting to his surgical contracting locations: he flies his own helicopter. This year, he made an even bolder move by purchasing a $750,000 airplane. With $300,000 down and $450,000 financed, he’ll be saving $180,000 in taxes, thanks to Section 179.

Here’s how it works:

• Total cost: $750,000

• Section 179 deduction: Up to $1,160,000 (within the limit)

• Bonus depreciation: Applies to the remaining balance (60% in 2024) after the Section 179 deduction, allowing for additional savings.

This smart tax move significantly lowers his tax liability while giving him a valuable tool to enhance his work-life balance and efficiency. Plus, financing doesn’t reduce the deduction—it’s based on the total purchase price, not the amount you pay upfront.

My Range Rover Decision

This story reminds me of a decision I made two years ago. I purchased a Range Rover Sport through my professional corporation, fully leveraging the Section 179 deduction. At the time, there was also 100% bonus depreciation, which made the decision even sweeter. That vehicle not only served as reliable transportation but also reduced my taxable income significantly that year. These types of tax-savvy decisions make a massive difference over time, especially for independent doctors.

What Qualifies for Section 179?

You need to check out my free e-book on section 179 that outlines the top 10 uses for doctors: Section 179 Deductions for Independent Physicians

In short, here are some key examples of qualifying purchases:

1. Vehicles: SUVs and heavy vehicles over 6,000 pounds gross vehicle weight (like my Range Rover Sport).

2. Equipment: Medical devices, computers, office furniture, and other essential tools for your practice.

3. Property: Upgrades to non-residential real estate used for business purposes.

4. Technology: EMR systems, telehealth equipment, or even AI-powered tools like ChatRx.

For physicians, these deductions can make it easier to invest in cutting-edge equipment and tools to improve patient care while strengthening your business.

Why Section 179 Matters for Independent Physicians

Independent doctors face unique challenges. From navigating payer systems to competing with larger hospital groups, every dollar counts. Section 179 provides:

• Immediate tax savings: Lower your taxable income in the year of purchase.

• Cash flow benefits: Retain more cash to reinvest in your practice or other ventures.

• Business growth: Acquire high-quality tools and equipment without waiting years to recoup the investment.

Crafting a Smart Tax Strategy

Making strategic purchases isn’t just about saving money—it’s about building a more sustainable practice. Here’s how you can approach it:

1. Consult a Tax Professional: Always work with a CPA who understands medical professionals and the unique needs of your practice.

2. Plan Ahead: Evaluate your equipment needs and plan major purchases before year-end to take full advantage of deductions.

3. Think Long-Term: Combine immediate tax savings with investments that will improve your practice’s efficiency and patient care.

Tool of the Week: Section 179 Deduction Calculator

This online calculator will help you estimate potential tax savings from your equipment investments in just a few minutes.​

Access the PEAC Solution’s Online Tool → Section 179 Deduction Calculator

Scale with Consultation or Coaching

Want personal guidance? My 1:1 coaching and consultations help you execute faster and smarter.​

Book a $99 Strategy Consultation Session →Business Consultation with Dr. Stillson

Get Started With 1:1 Business Coaching Today → Sign up for Business Coaching with Dr. Stillson

Take Control of Your Financial Future

Smart tax strategies like Section 179 are essential tools for independent doctors who want to thrive both professionally and financially. Whether you’re purchasing a vehicle, upgrading equipment, or even buying an airplane, these decisions can have a profound impact on your bottom line.

Ready to take the next step? Let’s work together to ensure your financial strategies align with your professional goals. Visit PEA-SimpliMD today, check out our membership options and discover how we can help you achieve success on your terms.