Two tax provisions let dental practice owners deduct the full cost of equipment in the year it’s placed in service, instead of spreading that deduction over years of depreciation schedules. Section 179 and bonus depreciation work toward the same goal but operate differently, and the choice between them can affect how much flexibility you have, what happens if the practice has a down year, and how a future sale looks on paper.
They’re not mutually exclusive either. Many dental practices use both in the same year, stacking them strategically. The question isn’t which one is better in the abstract. It’s which one fits your practice’s numbers this year, and whether you’ve confirmed the equipment will actually be placed in service before December 31.
What Section 179 actually does for a dental practice
Section 179 of the Internal Revenue Code lets you deduct the full purchase price of qualifying equipment in the year it’s placed in service, rather than depreciating it over the equipment’s useful life.
For 2026, the Section 179 deduction limit is $2,560,000, and it phases out dollar-for-dollar once total qualifying purchases for the year exceed $4,090,000 — both 2026 figures set by Rev. Proc. 2025-32, the IRS’s annual inflation adjustments, and indexed each year. The deduction applies to new and used equipment, software, and certain leasehold improvements to your practice space, so a CBCT scanner, CAD/CAM milling unit, or operatory renovation can all qualify.
One important constraint: Section 179 cannot create a net operating loss. The deduction is capped at the practice’s taxable income for the year. If you buy more equipment than your income supports, the unused deduction carries forward to future years rather than creating a loss. That carry-forward feature is one of Section 179’s strengths for planning, since it banks unused deduction capacity without triggering a loss on the practice’s books.
Understanding how Section 179 interacts with your income floor is what makes the comparison with bonus depreciation useful, because bonus depreciation operates without that same ceiling.
How bonus depreciation works in 2026 and why the OBBBA changed the math
Bonus depreciation under IRC Section 168(k) allows an immediate first-year deduction for qualifying property placed in service during the tax year. The One Big Beautiful Bill Act (OBBBA), enacted in July 2025, made 100% first-year bonus depreciation permanent for qualifying property acquired after January 19, 2025, per IRS guidance on the change.
Unlike Section 179, bonus depreciation can create or deepen a net operating loss. That’s a meaningful difference. If your practice had an unusually expensive year, a slow summer, or you’re in a startup phase after buying into a practice, bonus depreciation lets you book a loss that carries forward to offset income in future years.
Bonus depreciation applies automatically unless you affirmatively elect out of it. Section 179 requires an election on your return. That distinction matters less operationally and more for understanding why both deductions can coexist on the same year’s tax return without conflicting.
With that foundation in place, the next question is whether the placed-in-service date for your planned equipment purchase actually lands where you expect it to.
The placed-in-service rule is the detail dentists miss most often
Both Section 179 and bonus depreciation require the equipment to be placed in service during the tax year you’re claiming the deduction, not just ordered or paid for. A CBCT scanner ordered in November 2026 but delivered and installed in January 2027 generates a 2027 deduction, not a 2026 one.
The IRS defines ‘placed in service’ as the date the equipment is ready and available for its intended use. In most dental settings, that means the installation date. For dental equipment with a long lead time or complex installation, this date can slip by weeks without anyone flagging it.
For practices planning year-end equipment purchases, the placed-in-service date belongs in the conversation with the vendor, confirmed in writing, ideally in Q3 when there’s still time to adjust the purchase timeline if installation looks like it might slip. Confirming in October is planning. Confirming in December is hoping.
Once the placement date is locked, the next question is whether Section 179, bonus depreciation, or a combination of both produces the better outcome for your practice this year.
How Section 179 and bonus depreciation interact when you use both
Dental practices frequently use Section 179 and bonus depreciation together on the same year’s equipment purchases, and the order of operations matters. Section 179 applies first, up to the deduction limit and up to the practice’s taxable income for the year. Bonus depreciation then applies to any remaining basis in qualifying property.
In practice, a dental office with a significant equipment year might use Section 179 on a portion of the purchases to stay within a comfortable income ceiling, then take bonus depreciation on the remainder. The result is a full first-year deduction on the combined total, with more control over which entity or tax year absorbs any resulting loss.
The combination matters especially for multi-owner practices or practices structured as S-corps and partnerships. Deductions pass through to the owners’ personal returns, and each owner’s income situation in a given year affects how much of a deduction they can actually absorb. Coordinating these elections across owner returns works better when the tax advisor and the financial advisor are working from the same picture, which is precisely what a dental-specific integrated advisory team is built for.
Which deduction fits your dental practice better?
Neither Section 179 nor bonus depreciation universally produces a larger deduction on the same equipment purchase. Both can yield a full first-year write-off. The difference is in the mechanics and constraints that make one a better fit depending on where your practice stands financially.
Section 179 tends to be the better primary choice when the practice has consistent taxable income and you want to control the size of the deduction precisely. It doesn’t create a net operating loss, which keeps the financial picture cleaner for lenders or buyers evaluating the practice. If a loan, line of credit, or sale is within the next few years, the optics of a profitable practice on paper matter.
Bonus depreciation is more powerful when the practice is in a loss year, a startup phase, or when the equipment purchase is large enough that Section 179’s income limitation becomes a real constraint. The ability to carry a loss forward adds flexibility, and with the rate now permanently set at the full deduction level under the OBBBA, it’s a reliable long-term planning tool.
For most dental practices, the right answer involves some combination of both, calibrated to the current year’s income, the practice’s near-term plans, and the owners’ individual tax situations.
Section 179 and bonus depreciation for a dental S-corp: what changes?
Many dental practices are structured as S-corps, and entity structure changes the calculus for these deductions in a few ways. S-corp owners split practice income between a reasonable salary, which is subject to payroll taxes, and a distribution, which is not. Both deductions reduce the practice’s taxable income, which flows through to the owner’s personal return via the K-1.
A large equipment deduction in a given year could wipe out K-1 income entirely, which is generally favorable for the owner’s tax bill. But it also means the practice’s financials show lower income for that year, and lower income is what a lender or buyer sees when they pull returns. If financing or a near-term sale is in the picture, this tradeoff deserves its own planning conversation.
Basis limitations apply at the S-corp level as well. An owner’s ability to deduct a loss flowing through from the S-corp is limited to their basis in the company’s stock plus any loans made to the company. If basis is already low, a large bonus depreciation deduction may generate a loss the owner can’t fully use in the current year. Working through the numbers with a dental-specialized tax advisor prevents a deduction from being wasted.
These S-corp dynamics connect the equipment deduction decision to compensation strategy, practice valuation, and personal financial planning. A siloed CPA and a siloed financial advisor each only see part of that picture, which is the problem the integrated model is designed to solve.
Does the OBBBA change anything for dental equipment purchased earlier in 2025?
Yes, and the effective date matters for any practice that bought major equipment in early 2025. The OBBBA’s permanent 100% rate applies to qualifying property acquired after January 19, 2025; equipment acquired on or before that date falls under the prior law’s phase-down schedule (40% for most property in 2025).
If your practice acquired major dental equipment after January 19, 2025, it’s worth reviewing whether the full 100% deduction was claimed on the 2025 return — and, if it wasn’t, whether amending pencils out.
The OBBBA also removed the uncertainty that had surrounded bonus depreciation planning. Dental practices can now plan equipment purchases in 2026 and beyond with the full immediate deduction available as a stable planning assumption, rather than working around a declining rate.
For a rundown on which equipment categories qualify and how the placed-in-service date is documented, the dental equipment deduction guide on the Core Advisors site goes into the specifics. The tax planning for dentists page lays out where Section 179 and bonus depreciation fit across a full-year strategy.
If your practice is buying equipment before year-end and you want to confirm the deduction lands where it should, Core Advisors can work through the Section 179 and bonus depreciation math as part of a full 2026 tax planning conversation. Reach out through our dental CFO services page to get started.
This article is for educational purposes only and is not tax, legal, or financial advice. Consult your own tax or financial advisor about your specific situation.
