Drug Topics - October 27, 2008 - (Page 3) DRUG TOPICS 3 Of Interest to Pharmacists Significant tax savings for capital investments by year-end Pharmacies must act soon to benefit Graham Schillmoller Y our pharmacy enjoys a significant, but time-urgent opportunity to take advantage of substantial tax savings on capital investments made this year. Essentially, the Economic Stimulus Act of 2008 allows you to accelerate the time you can deduct the Graham Schilpurchase price of bought or lmoller, Parata leased equipment. Systems The savings, obtained through the section 179 expense and a special depreciation allowance, let you to deduct up to $250,000 of the purchase price and 50 percent of the remaining value, respectively. (Section 179 expense deduction is subject to business income limitations and phases out for every dollar over $800,000 of qualifying property.) You can depreciate the remaining value of the purchase price and deduct it over the IRS-prescribed useful life of the property. (See examples below.) To qualify, your pharmacy must acquire the equipment and place it into service before the incentives expire: special depreciation allowance expires Dec. 31, 2008, and the section 179 expense expires for fiscal years beginning after 2008. SAMPLE SAVINGS OPPORTUNITY1 Unless these incentives are extended for businesses operating under a calendar year, the section 179 expense will be significantly less in 2009, and the Special Depreciation Allowance will be eliminated. If your pharmacy is considering any type of capital investments, clearly now is the time to act. Contact your tax advisor to explore how your pharmacy can take advantage of the Economic Stimulus Act of 2008. You can also learn more at a helpful information Web site, www.section179.org. Graham Schillmoller, CPA, is director of finance & business services, Parata Systems If your pharmacy is considering any type of capital investments, clearly now is the time to act. Example 1 2008 Equipment purchases Estimated deductions Section 179 deduction 50 percent special depreciation Standard depreciation Total estimated deductions Estimated tax savings Effective equipment cost 1 Example 2 2008 $165,000 $165,000 $0 $0 $165,000 $69,300 $95,700 2009 $165,000 $130,000 $0 $7,000 $137,000 $57,540 $107,460 2009 $280,000 $130,000 $0 $30,000 $160,000 $67,200 $212,800 $280,000 $250,000 $15,000 $3,000 $268,000 $112,560 $167,440 Estimates assume a 42 percent combined federal and state tax rate, a tax life of 5 years for the equipment and a Calendar Year taxpayer. Consult your tax advisor to learn about the potential savings for your pharmacy. http://www.section179.org
Table of Contents Feed for the Digital Edition of Drug Topics - October 27, 2008 Drug Topics - October 27, 2008 Contents Significant Tax Savings For Capital Investments by Year-End Pharmacists to Play Larger Role in Pediatric Immunization Drug Topics - October 27, 2008 Drug Topics - October 27, 2008 - Contents (Page 1) Drug Topics - October 27, 2008 - Contents (Page 2) Drug Topics - October 27, 2008 - Significant Tax Savings For Capital Investments by Year-End (Page 3) Drug Topics - October 27, 2008 - Pharmacists to Play Larger Role in Pediatric Immunization (Page 4) Drug Topics - October 27, 2008 - Pharmacists to Play Larger Role in Pediatric Immunization (Page 5)
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