Educational tax information
How Healthcare Providers Can Deduct the Full Cost of X-Ray and Imaging Equipment in the Year It’s Placed in Service
This information is for general educational purposes only and is not tax, legal, or financial advice. FixMyXRay.com and its employees are not tax professionals, CPAs, or attorneys. Tax rules are complex and depend on your specific facts, state of residence, and other circumstances. Always consult your own tax advisor, CPA, or attorney before making any tax election decisions.
The 2026 figures come from Revenue Procedure 2025-32 and should be verified against the latest IRS materials.
Key Points for 2026
- Section 179 maximum deduction for tax years beginning in 2026: $2,560,000 (IRS Publication 946; Revenue Procedure 2025-32).
- Phase-out begins once total Section 179 property placed in service exceeds $4,090,000; fully phased out at $6,650,000.
- Section 179 is limited to taxable income from the active conduct of a trade or business; any excess carries forward.
- 100% bonus depreciation is permanent for qualified property acquired and placed in service after January 19, 2025 (Public Law 119-21; IRS Notice 2026-11).
- Most single digital radiography systems, long-length panels, and portable units fall well below the Section 179 phase-out threshold.
- Equipment must be placed in service (installed and ready for clinical use) by December 31 of the tax year to qualify for that year’s deduction.
Many healthcare practices can significantly reduce the after-tax cost of upgrading or purchasing diagnostic imaging equipment by using two longstanding federal tax provisions: the Section 179 deduction and the special depreciation allowance commonly called bonus depreciation. When equipment is placed in service by the end of the tax year, a practice may be able to deduct the full cost in that year rather than spreading the deduction over five or seven years. For practices that have taxable income, the cash-flow benefit of a large current-year deduction can make a meaningful difference in the net cost of new or used digital radiography systems, long-length panels, portable units, and related equipment.
The rules below are drawn from the Internal Revenue Code, IRS Publication 946 (How To Depreciate Property), Revenue Procedure 2025-32, and IRS Notice 2026-11. Publication 946 (2025 edition) states that for tax years beginning in 2025 the maximum Section 179 deduction is $2,500,000 and the phase-out begins at $4,000,000. The 2026 figures reflect the inflation adjustment in Revenue Procedure 2025-32.
2026 Section 179 Limits
For tax years beginning in 2026, the Section 179 limits are as follows (IRS Publication 946 and Revenue Procedure 2025-32):
| Limit | Amount |
|---|---|
| Maximum Section 179 deduction | $2,560,000 |
| Phase-out begins (total Section 179 property placed in service) | $4,090,000 |
| Deduction fully phased out | $6,650,000 |
The maximum deduction is reduced dollar-for-dollar by the amount by which the cost of Section 179 property placed in service during the year exceeds $4,090,000. The deduction is also limited to taxable income from the active conduct of a trade or business; any excess carries forward.
How the Section 179 Phase-Out Threshold Works
Under IRC §179(b)(2), the $2,560,000 maximum deduction for tax years beginning in 2026 is reduced (but not below zero) by the amount by which the cost of Section 179 property placed in service during the taxable year exceeds $4,090,000. This dollar-for-dollar reduction continues until the deduction is completely eliminated when total Section 179 property placed in service reaches $6,650,000 ($4,090,000 + $2,560,000). These thresholds are set by Revenue Procedure 2025-32 and described in IRS Publication 946.
Example 1: A practice places $3,500,000 of qualifying equipment in service. Because this amount is below the $4,090,000 threshold, the full $2,560,000 maximum remains available (subject to the taxable-income limitation).
Example 2: A practice places $4,500,000 of qualifying equipment in service. The excess over the threshold is $410,000 ($4,500,000 − $4,090,000). The maximum Section 179 deduction is therefore reduced by $410,000, leaving $2,150,000 available ($2,560,000 − $410,000).
Example 3: A practice places $6,650,000 or more of qualifying equipment in service. The phase-out is complete and no Section 179 deduction is allowed for the year. Any remaining basis may still qualify for 100 percent bonus depreciation under §168(k), if the property otherwise meets the requirements.
Section 179: Immediate Expensing of Qualifying Equipment
Section 179 of the Internal Revenue Code allows a taxpayer to elect to treat the cost of certain qualifying property as an expense in the year the property is placed in service, rather than depreciating it over time. The election is made on Form 4562.
Key requirements under Section 179 include:
- The property must be tangible personal property (or certain other qualifying property) acquired by purchase for use in the active conduct of a trade or business.
- Business use must be more than 50 percent.
- The property must be placed in service during the tax year for which the deduction is claimed.
- The deduction cannot exceed the taxable income derived from the active conduct of any trade or business. Any amount disallowed by the income limitation carries forward to later years.
- Both new and used equipment can qualify, provided the equipment is new to the taxpayer and is not acquired from a related party in a disqualifying transaction.
Medical imaging equipment—including digital radiography systems, flat-panel detectors, long-length DR panels, portable and mobile X-ray units, and related hardware used by chiropractors, veterinarians, podiatrists, and other specialists—generally meets the definition of tangible personal property used in a trade or business. Dental imaging equipment follows the same rules.
The Section 179 Income Limitation
Under IRC §179(b)(3) and IRS Publication 946, the Section 179 deduction cannot exceed the taxpayer’s taxable income derived from the active conduct of any trade or business for the year. If the potential deduction is larger than that taxable income, the excess is carried forward to later years.
This limitation means the deduction can reduce taxable income for the current year, but it cannot create or increase a business loss. For a practice that already has positive taxable income from its operations, a qualifying equipment purchase placed in service before year-end can lower the amount of income that is subject to tax in that year (subject to the overall dollar limits and other rules).
Bonus depreciation under Section 168(k) is not subject to this income limitation and can create or increase a net operating loss. The two provisions are often used together.
Bonus Depreciation under Section 168(k)
Qualified property may also be eligible for the special depreciation allowance under Section 168(k), commonly called bonus depreciation. Under the One Big Beautiful Bill Act (Public Law 119-21, enacted July 4, 2025), 100 percent bonus depreciation was permanently restored for qualified property acquired and placed in service after January 19, 2025. IRS Notice 2026-11 provides interim guidance confirming application of the existing regulatory framework with the updated dates.
Publication 946 (2025 edition) confirms that taxpayers may elect to take a reduced special depreciation allowance for this property during the first tax year ending after January 19, 2025, instead of the 100 percent allowance. The reduced rate is generally 40 percent. It is 60 percent for certain long-production-period property and certain aircraft.
For the types of equipment commonly purchased by practices that use FixMyXRay.com—such as digital radiography panels, long-length full-spine systems, portable and mobile X-ray units, and related imaging hardware—the 40 percent elective rate would typically apply if the election is made. These systems are standard tangible personal property with recovery periods of 20 years or less and do not fall into the long-production-period or aircraft categories that qualify for the 60 percent rate. After the reduced allowance is taken, the remaining basis is depreciated under normal MACRS rules.
Because 100 percent bonus depreciation is not limited by taxable income and can create or increase a net operating loss, while Section 179 cannot, some taxpayers evaluate whether a reduced 40 percent (or 60 percent) election for the first tax year ending after January 19, 2025 would better coordinate with their other income, deductions, and tax attributes. The election simply changes the amount of the first-year allowance; it does not alter the underlying qualification rules for the equipment. Whether any particular election is appropriate depends on the taxpayer’s overall facts and is a determination made with a tax advisor.
Key points about bonus depreciation:
- No annual dollar limitation and not limited by taxable income from the business.
- Can create or increase a net operating loss.
- Applies after any Section 179 election to the remaining basis of qualified property.
- Most diagnostic imaging equipment has a recovery period of 20 years or less under MACRS and therefore qualifies.
- Medical and dental equipment is typically classified as 5-year property under the asset class tables in IRS Publication 946.
Taxpayers may elect out of bonus depreciation for any class of property. A transitional election is also available under Section 168(k)(10) for certain property placed in service in the first tax year ending after January 19, 2025.
Section 179 vs. Bonus Depreciation
| Feature | Section 179 | 100% Bonus Depreciation |
|---|---|---|
| 2026 dollar limit | $2,560,000 | None |
| Phase-out | Begins at $4,090,000 | None |
| Limited by business income | Yes (excess carries forward) | No (can create NOL) |
| Election required | Yes (Form 4562) | Applies automatically unless elected out |
A common approach is to elect Section 179 for all or part of the cost (up to the dollar and income limitations), then apply 100 percent bonus depreciation to any remaining basis. For many practices purchasing a single digital radiography system or long-length panel, the combination produces a full first-year deduction of the entire cost when the equipment is placed in service by December 31.
The Importance of the Placed-in-Service Date
The deduction is available only for the tax year in which the equipment is placed in service—meaning it is installed, ready, and available for its intended use (IRS Publication 946). Ordering or paying for equipment in December is not sufficient; the system must actually be ready for clinical use by December 31. This is why many practices time larger equipment purchases for the fourth quarter. When the equipment is placed in service before year-end, the deduction reduces taxable income for that year and the tax benefit is realized when the return is filed the following spring (or can be used to adjust estimated tax payments).
Illustrative Savings Examples
Important: The figures below are simplified illustrations only. They assume the full cost is deductible in the year the equipment is placed in service under Section 179 and/or 100% bonus depreciation, that the practice has sufficient taxable income to absorb a Section 179 election, and that the stated rates apply. They ignore state taxes, other deductions, phase-out rules, and the taxpayer’s actual facts. Actual results will differ. These examples are not tax advice.
Assumed federal tax rates used in the table: 24%, 32%, and 37%.
| Purchase Price | At 24% | At 32% | At 37% |
|---|---|---|---|
| $10,000 | $2,400 | $3,200 | $3,700 |
| $15,000 | $3,600 | $4,800 | $5,550 |
| $18,000 | $4,320 | $5,760 | $6,660 |
| $20,000 | $4,800 | $6,400 | $7,400 |
| $25,000 | $6,000 | $8,000 | $9,250 |
| $45,000 | $10,800 | $14,400 | $16,650 |
| $55,000 | $13,200 | $17,600 | $20,350 |
| $75,000 | $18,000 | $24,000 | $27,750 |
| $100,000 | $24,000 | $32,000 | $37,000 |
| $125,000 | $30,000 | $40,000 | $46,250 |
| $150,000 | $36,000 | $48,000 | $55,500 |
| $200,000 | $48,000 | $64,000 | $74,000 |
| $250,000 | $60,000 | $80,000 | $92,500 |
The amounts shown are the approximate federal tax reduction if the full purchase price is deducted in the year placed in service and the practice is taxed at the stated rate on that income. Higher or lower rates, state taxes, and other factors will change the result.
How much can I save?
This is a simplified illustration only. It assumes the full cost is deductible in the year placed in service under Section 179 and/or 100% bonus depreciation. It assumes sufficient taxable income to absorb a Section 179 election. It ignores state taxes, phase-outs, other deductions, and the taxpayer’s actual facts. Actual results will differ. This is not tax advice. FixMyXRay.com is not a tax professional. Consult your own tax advisor.
Choose a price from the table, or type another amount.
Purchase price × assumed rate = estimated federal tax reduction
$100,000 × 32% = $32,000
Approximate after-tax cost = $100,000 − $32,000 = $68,000
This is a simplified illustration only. It assumes the full cost is deductible in the year placed in service under Section 179 and/or 100% bonus depreciation. It assumes sufficient taxable income to absorb a Section 179 election. It ignores state taxes, phase-outs, other deductions, and the taxpayer’s actual facts. Actual results will differ. This is not tax advice. FixMyXRay.com is not a tax professional. Consult your own tax advisor.
Frequently Asked Questions
Does new and used equipment both qualify?
Yes. Both new and used equipment can qualify for Section 179 and for bonus depreciation, provided the equipment is new to the taxpayer and meets the other requirements (IRC §179; IRS Publication 946).
What if the practice finances the equipment?
Financing generally does not prevent the deduction, as long as the practice acquires the equipment by purchase (or under a qualifying capital lease) and places it in service during the tax year. True operating leases are treated differently. Confirm the structure with your tax advisor.
Will a typical single X-ray or DR system hit the phase-out?
No. Most individual digital radiography systems, long-length panels, and portable units cost far less than the $4,090,000 threshold at which the phase-out begins.
What happens if the equipment is not ready by December 31?
If the equipment is not placed in service by December 31, the deduction moves to the following tax year. Delivery or payment alone is not enough (IRS Publication 946).
State Tax Considerations
Federal rules do not automatically apply at the state level. Some states conform to the federal Section 179 limits and bonus depreciation percentages; others have lower limits, require add-backs, or do not allow bonus depreciation at all. Practices should confirm the treatment in their state with their tax advisor.
Equipment Covered by FixMyXRay.com
The types of systems and components available through FixMyXRay.com—including digital radiography panels, long-length full-spine systems, portable and mobile units, and related installation and service—are the kinds of tangible personal property that practices commonly evaluate for Section 179 and bonus depreciation treatment. The same rules apply whether the end user is a chiropractic practice, a veterinary clinic, a podiatry office, or (in the future) a dental practice. Eligibility is determined by how the equipment is used and the taxpayer’s overall facts, not by the specialty of the provider.
Conclusion
Section 179 and 100 percent bonus depreciation give many healthcare practices a practical way to recover the cost of qualifying imaging equipment in the year it is placed in service rather than over five or seven years. For typical single-system purchases that stay below the phase-out threshold, the combination of the two provisions can produce a full first-year deduction when the equipment is ready for clinical use by December 31. Because state rules, income limitations, and individual circumstances vary, the only reliable way to determine the actual benefit is to review the specific facts with a qualified tax advisor before the purchase is finalized.
Next Steps
Because the dollar amounts, phase-out thresholds, and interaction with other tax provisions can change, and because state rules vary, the only reliable way to determine the benefit for a specific practice is to review the facts with a qualified tax professional. Practices that are considering an equipment purchase or upgrade before year-end should discuss timing, financing structure, and the Section 179 election with their advisor early enough to ensure the equipment can be placed in service by December 31.
For questions about the equipment itself—specifications, compatibility with existing generators, installation, or service—contact FixMyXRay.com.
Bibliography of Official Sources
- Internal Revenue Code §179: https://www.law.cornell.edu/uscode/text/26/179
- Internal Revenue Code §168(k): https://www.law.cornell.edu/uscode/text/26/168
- IRS Publication 946, How To Depreciate Property (2025 edition, including “What’s New for 2025”): https://www.irs.gov/publications/p946
- Revenue Procedure 2025-32 (inflation adjustments for tax years beginning in 2026): https://www.irs.gov/pub/irs-drop/rp-25-32.pdf
- IRS Notice 2026-11 (interim guidance on 100 percent bonus depreciation): https://www.irs.gov/pub/irs-drop/n-26-11.pdf
- Public Law 119-21 (One Big Beautiful Bill Act): https://www.congress.gov/bill/119th-congress/house-bill/1
This page is provided for educational purposes only and does not constitute tax advice. Always consult your own tax advisor.