2008 Tax Law
Always check with your accountant or financial
advisor to verify tax or accounting issues and any tax benefits.
Economic Stimulus Act of 2008: A $250,000 write-off!
Section 179 Federal Income Tax Deduction: This deduction has been
increased as part of the Economic Stimulus Act of 2008 and it allows
a company to deduct the first $250,000 of equipment (Section 179 Property)
purchased in 2008 from their taxable income. For companies purchasing
(or leasing - with a $1.00 buy-out lease) up to $800,000 of equipment
in 2008, this deduction is available in full. It then phases out on
a dollar-for-dollar basis between $800,000 and $1,050,000 and it is
not available for companies purchasing over $1,050,000 of equipment
in 2008. However, companies can finance purchases over $800,000 with
an operating lease and may still be able to claim this deduction.
50% Bonus Depreciation (expires December 2008)
The Economic Stimulus Act of 2008 also allows for a special 50% bonus
depreciation for equipment placed in service for use in your trade
or business for the production of income before January 1, 2009. This
deduction allows an additional 50% first-year depreciation on the
adjusted basis of qualified new equipment.
Standard Depreciation
Additionally, companies can take their standard depreciation deductions
on the adjusted basis of qualified equipment. Machine tools and fabricating
equipment are typically depreciated over 7 years.
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**Specials**