Small businesses, including independent pharmacies, were significantly impacted by the COVID-19 pandemic, and the healthcare community will feel the effects of the virus for years to come. As the year comes to a close, it is essential to evaluate your financials and prepare for the year ahead. Your independent pharmacy revenue and taxes may be much different this year than years past, and they may not align with your original goals or expectations.
While COVID-19 brought many challenges for businesses, there are some tax breaks and financial tips that can help. From IRS Section 179 to the HEROES Act, you can mitigate the impact of COVID-19 on your business and personal life and better prepare for tax time. Keep reading for end-of-year tips for your independent pharmacy.
Understand the HEROES Act for Pharmacists and Pharmacy Techs
The original Helping Emergency Responders Overcome Emergency Situations (HEROES) Act applied to doctors, nurses, physician assistants, nurse practitioners, support staff at hospitals and medical facilities, and first responders, including paramedics, EMTs, firefighters, and law enforcement officers. However, the act expanded to include pharmacists and pharmacy technicians.
Emergency responders and healthcare professionals have taken significant risks during the COVID-19 pandemic. Independent pharmacies have remained open, offering new and innovative services to care for the patients in their communities. Pharmacy staff, including pharmacists and technicians, have risked their health and safety while working to keep their patients safe. The HEROES Act was designed to thank these individuals for their hard work and dedication during unprecedented times.
Under the HEROES Act, the government suspended federal tax withholding for four months. The US Department of Treasury Secretary also has the authority to extend withholding. Income up to $150,000 annually is eligible for a tax holiday, and any income exceeding that amount remains subject to regular tax rates. Individuals who work in independent pharmacies can benefit from the tax holiday and relieve some of the financial stress or pressure caused by the COVID-19 pandemic. Check with your accountant if utilizing this tax break is in your best interest.
Take Advantage of Available Tax Breaks for Independent Pharmacies
Independent pharmacies should be aware of the tax benefits available for their business. Consider possible tax deductions that can help your independent pharmacy when making major financial decisions. IRS Section 179 offers a tax benefit of up to $1,000,000 per year to help small businesses acquire capital equipment and software to operate their business.
By leveraging the tax benefits available from IRS Section 179, you can improve the efficiency and profitability of your community pharmacy. Businesses can deduct the purchase price of equipment in full. This tax code enables you to purchase the equipment your pharmacy needs and finance or lease equipment.
IRS Section 179 includes hardware and software needed to run your business. You can review the complete list of equipment that qualifies under Section 179, but most equipment and software used for your business should be eligible. From printers, scanners, and computers to pharmacy management software and point-of-sale, you can purchase what you need with a special IRS Section 179 form.
Tax benefits and enhancements under Section 179 typically expire by the end of the year, so now is the best time to purchase the hardware or software your business needs. Deducting the total cost of your equipment significantly reduces how much you have to pay for hardware and software.
Evaluate Your Software and Hardware
COVID-19 changed the way pharmacies do business. From contactless payment and curbside delivery to changing inventory and potential vaccine delivery, the needs of independent pharmacies are much different now than they were last year. Even without the challenges and obstacles brought by COVID-19, the pharmacist's role is evolving. Pharmacists can provide valuable clinical services for their community, but they need the right tools.
Now is the best time to evaluate your pharmacy software and hardware.
- How well did your existing pharmacy management solution hold up during the pandemic?
- Will your software and hardware enable you to reach your goals for 2021 or hinder you?
- Do you have the tools you need to keep up with the evolving role of pharmacists in the healthcare continuum?
Independent pharmacies may be hesitant to invest in a new pharmacy management solution or hardware, but using an inadequate system will only hurt your business in the year ahead. The end of the year is a great time to switch to a complete pharmacy management solution, set your business up for success in 2021, and take advantage of available tax breaks.
Contact our sales team today to learn more about applying IRS Section 179 to your TDS software and hardware purchases.
Existing Rx30 and Computer-Rx users can contact our hardware team to learn about leveraging Section 179 to upgrade your pharmacy hardware and equipment.