SECTION 179: A Year-End Tax-Smart Guide for Dental Labs & Digital Practices (2025 Edition)
3 days ago
3 min read
How Your CAD/CAM Equipment Purchases May Help Reduce Your Tax Burden Before December 31, 2025.
As the year ends, dental labs and digital practices aren’t just closing their final production cycles—they’re also assessing how to strategically manage investments, expenses, and year-end tax planning. One of the most impactful opportunities for equipment-heavy operations is Section 179 of the IRS Tax Code, which allows qualifying equipment purchases to be deducted in the same tax year they are placed into service.
For CAD/CAM users, Q4 is a prime time to upgrade mills, upgrade outdated workstations, and invest in higher-performance, productivity-boosting tools that can improve efficiency in 2026 and beyond. This guide explains how Section 179 works for dental labs and how to maximize potential benefits before the December 31 deadline.
What Is Section 179?
Section 179 is an IRS incentive that allows businesses to deduct the full purchase price of qualifying equipment purchased and placed into service by December 31, 2025.
For dental labs, qualifying equipment typically includes:
Milling machines
CAD/CAM workstation hardware
Production tools and tangible equipment
One-Time Software Upgrade / Update Fees, off-the-shelf software (with IRS limitations)
Instead of depreciating a machine over multiple years, Section 179 may allow labs to deduct the entire cost in one tax year—improving cash flow and reducing taxable income.
What Purchases Qualify Under Section 179 for Dental Labs?
Qualifying Categories
CAD/CAM Milling Machines
4-axis and 5-axis mills used in production workflows generally qualify as tangible manufacturing equipment.
High-Performance Workstations
Physical CAD, CAM, nesting, and computation hardware usually qualifies.
Tangible Manufacturing Tools
Includes:
Implant tooling
Production jigs
Physical calibration devices
Eligible Software
Only:
One-time purchase
Off-the-shelf
Non-custom software
Subscription-based services do not qualify.
Important Note: What Does Not Qualify
❌ Training
❌ Subscriptions
❌ Service agreements
❌ Remote support plans
❌ Custom or modified software
❌ Service-based products
❌ Consumables DO NOT qualify under Section 179(e.g., zirconia, ceramic blocks, PMMA, wax, burs, etc.)
Labs may deduct these as supplies or COGS, but they are not eligible for Section 179.
Why Dental Labs Should Consider Section 179 Before December 31
1. Immediate Workflow Benefits
Upgrading equipment now can improve:
Toolpath calculation times (Improved Capacity)
Milling accuracy (Better Fits)
Production consistency (Less Remakes)
2. Potential Improvement in Cash Flow
Section 179 may allow the deduction to apply to the 2025 tax year rather than being depreciated over multiple years.
3. Perfect Timing with Year-End Pricing
Level Up offers Black Friday deals from Nov 24–29, 2025, offering significant savings on mills, workstations, and tools.
4. Preparation for 2026 Demand
Labs preparing for growth can start January with upgraded capacity already installed and running.
Examples of Potentially Qualifying CAD/CAM Purchases
(General guidance, not tax advice.)
Eligible
Milling Machines (tangible manufacturing equipment)
CAD/CAM Workstations
Physical tooling and production equipment
One-time purchase off-the-shelf software (if IRS-compliant)
Not Eligible
Materials and consumables (zirconia, blocks, burs, PMMA, wax, etc.)
Subscriptions or annual licenses
Service-based or cloud-based tools
Deadline Reminder: Equipment Must Be Placed Into Service by December 31
To qualify for Section 179 in the 2025 tax year:
✔ Purchased
✔ Delivered
✔ Installed
✔ Operational and ready for use
❗ Simply placing an order is NOT enough. Q4 delivery times and shipping congestion may affect eligibility.
This requirement is one of the most common reasons dental labs lose Section 179 qualification—timing and installation planning matter.
Section 179 Deduction Calculator
Estimate potential deductions for 2025 using this calculator
Important: Section 179 deductions cannot exceed taxable income.Any unused deduction may carry forward subject to IRS rules and CPA approval.
Frequently Asked Questions
1. Does my CAD/CAM mill qualify?
Most tangible manufacturing equipment (including milling machines) generally qualifies, but final determination must be made by your CPA.
2. Do I need the machine installed before December 31?
Yes. The IRS requires equipment to be delivered, installed, and ready for use.
3. Does CAD/CAM software qualify?
Only non-custom, off-the-shelf, one-time-purchase software may qualify.Most subscription-based systems do not.
4. Do workstations, scanners, or accessories qualify?
Physical hardware typically qualifies.Scanners and accessories may qualify if they are tangible production tools.
5. What documentation do I need?
Your CPA will likely request:
Purchase invoice
Proof of payment
Delivery confirmation
Installation/service logs
Activation or commissioning dates
Proper documentation helps with compliance and audit readiness.
Prepare Your Lab for 2026 — Maximize Year-End Savings
Level Up CAD/CAM is offering Q4 and Black Friday pricing on qualifying mills, workstations, and tangible equipment.
Fast shipping
Easy setup
CPA-confirmable Section 179-eligible hardware
Explore your options: Shop Year-End Deals
Important Disclaimer
This article is for educational purposes only and should not be interpreted as tax advice. Section 179 eligibility depends on your individual business situation, taxable income, and IRS guidelines. Always consult a licensed tax professional to confirm your specific deduction qualifications.
3 days ago
3 min read
0
35
0
