We've all heard about the impact of the Economic Stimulus
Plan on individual taxpayers, but not as much information
has been reported by the media regarding its effect on
small business. To stimulate a sluggish economy, Congress
has included in HR5140 a provision for nearly $50 billion
dollars in business tax cuts. This temporary change to the
tax code will allow American businesses to buy new
equipment this year with financial incentives designed to
expand inventories and create new jobs while dramatically
lowering their taxes.
What's In It for Me?
Understanding the business impact of HR5140 will allow you
to take full advantage of the benefits associated with it.
How does the act affect your business? Last year IRS
Section 179 allowed a business that spent less than
$500,000 on qualified tangible property to deduct the total
cost of those assets, up to $125,000. While this was an
attractive incentive, the Economic Stimulus Act of 2008 is
even more attractive. You may now deduct up to $250,000 for
equipment purchased in 2008. This means that a business
placing less than $800,000 of equipment in service this
year would immediately be able to deduct up to $250,000 of
its investment.
Section 179, But Better!
The expansion of Section 179 by the stimulus plan has
effectively doubled the amount of the deductions allowed
for new equipment. In addition, the Act generally permits a
bonus first-year depreciation deduction of 50% for
qualifying property acquired and put in service after
December 31, 2007 and before January 1, 2009. This bonus is
in addition to normal first-year depreciation. To reflect
the new special depreciation allowance, the IRS is
currently developing a new version of the depreciation and
amortization form for fiscal year filers. The new form will
be designated as the 2007 Form 4562-FY.
Equipment Financing and Leasing
If you have been considering adding equipment for your
business, now is the time to act. Qualified equipment is
defined in IRS Publication 946 and includes such common and
movable tangible property as copiers, fax machines,
computers, printers, some vehicles, office furniture, and
even off-the-shelf computer software. If you've been
thinking of expanding your fleet of vehicles, for example,
now is an excellent time to do that. Or perhaps you need to
upgrade your computers and your software. Equipment Finance
companies can provide the financing or leasing structure
you need so that you can quickly take advantage of the
newly offered tax deductions and bonuses.
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Assess your equipment needs, and then use this free Section
179 Calculator
http://www.Section179.org/section_179_calculator.html to
figure your costs and your savings resulting from the
Economic Stimulus Plan. This information offers you a
personal look at what the new legislation means to your
business specifically. To take advantage of this free
information, go to http://www.Section179.org
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