PART 7 — Depreciation, Bonus Write-Offs, and Big Equipment Purchases: What Doctors Should Do Before 2026

December 10, 2025

From the series: Are You Ready for 2026? The Top 20 Year-End Tax Tips to Maximize Your 2025 Deductions & Credits

Every physician hits a point in Q4 where the same question pops up:

“Should I buy this equipment now… or wait until next year?”

And you can feel the hesitation.
Not because the equipment isn’t needed — but because the timing affects your taxes more than most doctors realize.

This part of the series is where we simplify that entire decision.
Because for high-earning physicians — especially those with 1099 or practice income — the depreciation rules, bonus write-offs, and Section 179 deductions can dramatically shift your tax bill.

Let’s break it down in plain English.

Why This Topic Matters More in 2025

Two things are happening at the same time:

  1. Bonus depreciation keeps phasing down.

  2. Tax brackets rise in 2026.

So your deductions are worth more now.
You get bigger tax savings per dollar deducted.
And you’re still inside the final pre-2026 window where these write-offs hit the hardest.

If you need equipment, software, or technology for your medical work… timing matters.

A lot.

1. Understanding Section 179 (Your Instant Write-Off Tool)

Section 179 is the rule most physicians love once they finally understand it.

The rule basically says:

“If you buy qualifying equipment for your business, you can deduct up to the full cost this year.”

That’s it.
Simple.
Powerful.

Here’s the key:

It only works if the equipment is placed in service by December 31.

Not ordered.
Not shipped.
Not sitting in a box.

It must be:

  • Set up

  • Ready to use

  • Capable of performing its function

This is where many doctors get tripped up.
If you buy something on December 29 but don’t set it up until January — no 2025 deduction.

2. Bonus Depreciation (Still Good, But Shrinking)

Bonus depreciation used to be at 100%.
Meaning you could deduct the full cost even without Section 179.

But it’s phasing down:

  • 2023 → 80%

  • 2024 → 60%

  • 2025 → 40%

  • 2026 → 20%

This matters because many physicians:

  • Buy medical equipment

  • Upgrade telehealth setups

  • Purchase work-related computers

  • Build home studios

  • Improve home offices

  • Use software needed for their professional work

Bonus depreciation is still helpful in 2025 — but not as strong as previous years.
Which is why Section 179 is doing more of the heavy lifting now.

3. What Physicians Can Deduct Under These Rules

Here’s a simple list of items doctors often buy before year-end:

  • Telehealth lighting

  • High-quality webcams

  • Diagnostic tools

  • Stethoscopes

  • Laptops

  • Tablets

  • iPads for charting

  • Office chairs

  • Desks

  • Monitors

  • Printers

  • Medical bags

  • Software subscriptions

  • EMR tools

  • Cybersecurity tools

  • Point-of-care devices

If it supports your 1099 work or practice income, it likely qualifies.

This also ties into your broader deduction strategy from Part 6.

If you missed that part, here it is again:
Business deductions for physicians.

4. “Should I Buy Equipment in 2025 or Wait for 2026?”

This is the big year-end decision.

Here’s the easy framework:

Buy in 2025 if:

  • You want bigger deductions now

  • Your income is high this year

  • You want to stay under a higher bracket

  • You plan on a Roth conversion

  • You want to offset 1099 income

  • You want to reduce estimated taxes

  • You expect higher tax rates in 2026 (you would be right)

This is the year before tax brackets spike.
So every deduction is worth more.

Wait until 2026 if:

  • Your income this year is unusually low

  • You plan to reduce work hours in 2026

  • You don’t actually need the equipment now

  • Your cash flow is tight

  • You don’t have 1099 income this year

  • You want to stack deductions for a future high-income year

Waiting can be smart — but only if it fits your bracket strategy.

5. Don’t Forget: All of This Works Better With an S-Corp or Solo 401(k)

This is where deduction strategy gets fun.
If you are a 1099 physician using:

  • An S-corp

  • A Solo 401(k)

  • A cash balance plan

  • A hybrid deduction strategy

Equipment costs can offset the extra income you route through those structures.

If you need help evaluating whether your entity is set up correctly, review this again:
Best tax structure for physicians.

Your structure matters as much as the equipment itself.

6. A Quick Word on SUVs and Heavy Vehicles (The Doctor Favorite)

You’ve probably heard about the “heavy SUV deduction.”

Here’s the truth:

  • It can be a powerful deduction

  • But the rules tightened in recent years

  • Bonus depreciation is now lower

  • The business-use percentage must be real

  • You must track mileage carefully

  • The vehicle must be used over 50% for business

  • And you need 1099 income for it to qualify

This move is often misunderstood — but still works for the right doctor.

If you do telehealth from multiple sites or run a micro-practice, this may help more than you realize.

7. How These Write-Offs Tie Into Your 2026 Strategy

Here’s the part most physicians never think about:

Deductions are worth more in 2025 than in 2026.

Why?

Because:

  • Tax brackets rise

  • Standard deductions shrink

  • Phaseouts tighten

  • Married-filing-joint thresholds shrink

  • QBI may change

  • SALT deduction limitations shift

This makes depreciation more valuable today.
Not next year.

If you’re thinking long-term, this matters a lot.

Your Simple Year-End Depreciation Checklist

Before December 31:

  • Decide which equipment you actually need

  • Confirm it qualifies for Section 179

  • Confirm it will be placed in service before year-end

  • Compare 2025 vs 2026 tax brackets

  • Review bonus depreciation rules

  • Track every receipt

  • Pair this with your 1099 deduction strategy

  • Check how this affects your estimated taxes

  • Align the purchase with your entity structure

  • Keep documentation clean

This is the simplest way to use big deductions effectively.

FAQ — Depreciation & Equipment Write-Offs for Physicians

1. Do W-2 doctors qualify for these deductions?

Not usually.
These deductions apply mainly to 1099 work or practice income.

2. Does a laptop qualify if I use it for both personal and work?

Yes — you deduct the business-use percentage.

3. Can I deduct medical equipment I bought months ago?

Yes, as long as it was placed in service this tax year.

4. Do vehicles still qualify for big deductions?

Yes, but rules are stricter and bonus depreciation is lower.

5. Should I buy equipment just to get a deduction?

No.
Buy it only if it helps your practice or 1099 work.

Ready to talk strategy? Start here.

Visit contact physiciantaxsolutions.com to schedule a consultation and learn how we can help you take control of your tax strategy today.

This post serves solely for informational purposes and should not be construed as legal, business, or tax advice. Individuals should seek guidance from their attorney, business advisor, or tax advisor regarding the matters discussed herein. physiciantaxsolutions.com assumes no responsibility for actions taken based on the information provided in this post.

 

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