Every December, dentists buy equipment to lower their tax bill. Some of them get the deduction. Others find out in April that it doesn’t count for this year, even though they already paid for it.
The difference usually comes down to one date and two words: in service.
The short answer: dental equipment counts on your 2026 taxes only if it is installed and ready to use in your practice by December 31, 2026. Paying for it, ordering it or having it sit in a box in the back office is not enough. If it is in service in time, most practices can deduct the full cost this year, even if it’s financed.
The rule that decides it: “placed in service”
The IRS calls it placed in service: the equipment is ready and available for the job it was bought for. For a dental practice, that usually means it is:
- delivered to your office,
- installed and connected (software, network, water and air lines for chairs), and
- ready to use on patients, even if no patient has sat in front of it yet.
What does not count: a paid invoice, a signed purchase order, a deposit, equipment on backorder, or a scanner delivered on December 29 that the technician can’t install until January 6.
That’s why your real deadline is earlier than December 31. Ask your vendor now for a delivery and installation date in writing, and leave room for the holidays.
How much you can deduct in 2026
Two rules let you deduct the full cost in the first year, instead of spreading it over 5 to 7 years:
| Rule | 2026 | Good to know |
|---|---|---|
| Section 179 | Up to $2,560,000 of equipment. The limit starts to shrink once total purchases pass $4,090,000. | Limited to your business income. You choose which items to use it on. |
| 100% bonus depreciation | No dollar limit, for equipment acquired after January 19, 2025 | Can create a loss. Made permanent by the 2025 tax law. |
Both work for new and used equipment, as long as it’s new to your practice. For most practices the limits aren’t the problem. The timing is.
What counts (and what doesn’t)
Usually counts:
- intraoral scanners, CBCT and digital X-ray
- dental chairs and delivery units
- lasers, CAD/CAM milling units and 3D printers
- sterilization equipment
- computers, monitors and practice software you buy off the shelf
- office furniture
- most interior improvements to your office space
Usually doesn’t:
- the building itself and the land under it
- supplies you won’t use until next year
- anything still on order on December 31
Small items can be simpler: under the IRS de minimis rule, items that cost $2,500 or less each can usually be deducted right away.
4 traps we see every December
1. “Delivered” isn’t “in service.” Equipment sitting in the box on December 31 counts for 2027, not 2026.
2. Buying just for the deduction. A $100,000 scanner doesn’t save you $100,000. In the top 37% federal bracket it saves up to $37,000 in federal tax, and the other $63,000 is still your money. Buy what the practice needs, then time it right.
3. Your state may not follow. New York, New Jersey and California don’t follow federal bonus depreciation, so your state deduction can be smaller than the federal one.
4. Section 179 can’t create a loss. It’s capped at your business income, while bonus depreciation can push you into a loss. Which one to use, and on which items, is a planning decision, and one reason a dental CPA who plans during the year matters. It also matters if you sell the equipment early, because part of the deduction can come back as income.
A quick example
Take a practice owner who orders a $95,000 CBCT in November (illustrative numbers):
- Installed December 18: the full $95,000 can be deducted on the 2026 return. At a 35% combined tax rate, that’s about $33,250 less tax for 2026.
- Delivered December 28, installed January 5: the same machine, the same price, but the deduction moves to the 2027 return. The 2026 tax bill stays about $33,250 higher.
Same purchase. A one-week delay moves the deduction a full year.
Your December equipment checklist
- Decide now what the practice actually needs in the next 6 to 12 months.
- Get delivery and installation dates from the vendor in writing, with a buffer before the holidays.
- Keep the invoice, the delivery receipt and the installation sign-off, all dated before December 31.
- Record the date the equipment was ready to use (the technician’s report or a dated photo).
- Ask your CPA which deduction to use and what it does to your state taxes. If your CPA only calls at tax time, here are the questions to ask a CPA firm for your dental practice.
- Don’t stop at equipment. Payroll, bonuses and retirement plans have December 31 deadlines too. Our free Year-End Tax Checklist for Dentists lists all 8 moves.
Not sure your purchase will count?
Book a free strategy session. We’ll look at what you’re planning to buy, when it can be in service, which deduction fits your numbers, and the other moves your practice can still make before December 31.
Book your free strategy session
Frequently asked questions
Can I deduct equipment I ordered in December but receive in January?
Not on your 2026 return. Equipment counts in the year it is placed in service, so equipment installed in January is deducted on the 2027 return.
Can I deduct equipment I financed?
Yes. You can deduct the full cost in the year the equipment is placed in service, even if you’re still making loan payments.
Does used dental equipment qualify?
Yes. Both Section 179 and bonus depreciation work for used equipment, as long as your practice didn’t own or use it before.
What is the 2026 Section 179 limit?
$2,560,000. It starts to shrink, dollar for dollar, once your total equipment purchases for the year pass $4,090,000.
Is it better to lease or buy dental equipment?
It depends on your cash flow and your tax picture. With a true lease, you deduct the payments as you make them. Buying, or a lease with a $1 buyout, can let you deduct the full cost in the first year. Ask your CPA before you sign.
About the author
Natalya Grigoriev, CPA is the President of Custom Accounting CPA, a Certified Tax Coach and Certified Tax Planner, and the author of two Amazon books on tax planning. Her team works with dental practice owners nationwide on proactive tax strategy, entity design, retirement plans and practice transitions. In 2025 alone, Custom Accounting CPA saved $2,019,302 in taxes for 53 clients.
General education, not tax advice.
