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"There
may be liberty and justice for all, but there
are tax breaks only for
some"
-Martin A.
Sullivan
Don't let
the media fool you...the 2008 Economic Stimulus
Package is
much more than a $300-$1,200
check in the
mail.
A big portion of the
Stimulus Package also deals with incentives for
businesses. The catch is that you must
take advantage of these incentives during the
2008 calendar year. Here are some
highlights of the
package:
Section
179
The Section 179
deduction has been increased for equipment
purchased during 2008. Businesses can now
fully expense up to $250,000 of qualified
capital equipment so long as your total
qualified purchases are under $800,000.
For example, with an $800,000 purchase, the
first $250,000 can be expensed and the
remaining $550,000 will be depreciated
normally. Both new and used equipment are
eligible. The expensing phases out above
$800,000 and cannot be used at all for purchases
in excess of
$1,050,000.
Bonus
Depreciation
In addition to the
Section 179 increased deduction there is also a
bonus 50% depreciation for qualifying assets (in
addition to the regular first-year
depreciation). For the bonus depreciation
the equipment must be new and must be purchased
and put into use in
2008.
These incentives are
meant to encourage businesses to purchase the
equipment they need in 2008. Now is the
time to invest in the future of your company and
expand your service capabilities. These
incentives can be taken advantage of with a
properly structured equipment lease.
Please contact your tax advisor to learn about
the specific impact to your
business.
Here are some
suggestions on what to do
next:
-Think
about what equipment investment will position
your business for economic growth and
productivity.
-Evaluate
the equipment currently being utilized by your
organization and see if you could benefit from
updating, supplementing or replacing equipment
that gets used on a regular basis or from
expanding the capabilities of your
business.
-Add
up your potential equipment purchases. The
amount you spend and the types of equipment
purchased will determine the extent to which you
are eligible for one or both of the tax
incentives.
-Is
buying or leasing right for you? Before making a
purchase, talk to your accountant or tax
advisor. They can help determine
financing options and how the 2008 Stimulus
Package could have an impact on the leasing
rates that you might want to consider.
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