Economic Stimulus Act of 2008 Benefits Small Businesses!
The tax rebate payments to individuals will increase consumer spending, which will inevitably flow to small businesses.
Enhanced section 179 expensing allow businesses to deduct a greater amount of their investments in business property during 2008.
Expense (the 179 deduction) up to $250,000 for property purchased in your tax year that starts in 2008 and save on your taxes!
- For your tax year that begins in 2008, you may be able to expense up to $250,000.00 for property. This almost doubles the previous limit of $ 128,000,
But is only available for your 2008 tax year!
- Property that often qualifies includes machinery, refrigerators, grocery store counters, office equipment, printing presses, computers, off the shelf computer software, signs, gasoline storage tanks and pumps at retail services stations, single purpose agricultural or horticultural structure, and livestock (horses, cattle, hogs sheep, goats and other fur-bearing animals). Most passenger automobiles and other property used for transportation are also eligible for 179 deductions. Also the section 179 deduction for the cost of any sport utility vehicle with a gross vehicle weight of more than 6,000 pounds and not more than 14,000 pounds is limited to 25,000.
Incentive for Small Business to add capital Investment by offering 50% Bonus depreciation on 2008 purchases of qualifying assets in addition to the regular depreciation allowed .
Write it off faster with two deductions and save on your taxes!
- First Deduction: For property acquired, placed and kept in service in calendar year 2008, you may be able to write off 50% of what you paid for it (a special depreciation allowance).
- Second Deduction: In addition to the 50% write-off, you can take a write-off of the normal first year depreciation on the remaining 50% of what you paid for the property.
- Examples of eligible property are off- the-shelf computer software, qualified leasehold improvement property, and tangible property with a recovery period of 20 years or less, which includes cell phones, tractor units for over-the-road use, computers, computer peripheral equipment, office furniture and fixtures, and farm buildings.
- For passenger automobiles, vans and trucks depreciation limits are increased by $8,000 as follows:
- Depreciation limits for passenger automobiles, vans and trucks go from $2,960 to $10,960.
- Depreciation limits for vans and trucks (with a gross vehicle weight of 6,000 pounds or less) go from $3,160 to $11,160.
Note: This is not a complete list of all the provisions in the Act. Please give us a call to discuss an item in greater depth or to inquire about an item not on this list.
Disclaimer: This document represents a general overview of recent tax developments and should not be relied upon without an independent, professional analysis of how any of these provisions may apply to your specific situation. Any tax information contained in the body of this narrative was not intended or written to be used, and cannot be used, by the recipient for the purposes of avoiding penalties that may be imposed under the Internal Revenue Code or provisions of applicable state or local law.