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News American Recovery and Reinvestment Act of 2009
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Life of Assets in years: 7
Purchase Amount: $450,000
Amount Expensed - Section 179: $128,000
Amount Capitalized after Section 179 Deduction: $322,000
Bonus Depreciation(50% of the amount capitalized under Section 179): Not Available
Regular Depreciation (Calculated on the amount capitalized after Section 179 deduction and bonus depreciation): $46,000
Total Expense Deducted from Taxable Income (Amount Expensed Section 179 + Bonus Depreciation + Regular Annual Depreciation): $174,000
Life of Assets in years: 7
Purchase Amount: $450,000
Amount Expensed - Section 179: $250,000
Amount Capitalized after Section 179 Deduction: $200,000
Bonus Depreciation(50% of the amount capitalized under Section 179): $100,000
Regular Depreciation (Calculated on the amount capitalized after Section 179 deduction and bonus depreciation): $14,286
Total Expense Deducted from Taxable Income (Amount Expensed Section 179 + Bonus Depreciation + Regular Annual Depreciation): $364,286 The effect on—or benefit to—your company depends upon your individual tax situation. Please consult your tax advisor to evaluate this great opportunity and the substantial tax savings this presents.
The people at Northland Capital have developed a very nice model of what you could expect with regards to potential benefits of the Economic Stimulus Act in a spreadsheet form. AS ALWAYS, YOU SHOULD CONSULT YOUR FINANCIAL ADVISOR TO VERIFY ANY BENEFITS TO YOUR COMPANY. What this little file can do is give you some "what if" information regarding savings using different amounts. Ready to try out some numbers? Click here.
The American Recovery and Reinvestment Act of 2009 Provides Enormous Tax Depreciation Benefits
Early this year, President Obama signed the American Recovery and Reinvestment Act of 2009. This stimulus package enhanced two tax depreciation programs. Section 179 allows capital purchases, such as stone equipment, to be deducted from taxable income for capital purchases installed in 2009. This change has resulted in an additional $122,000 in depreciation expense for 2009. Also, you may be able to take advantage of the 50% Bonus Depreciation which was enacted as part of the stimulus package. This program allows companies to accelerate the amount of depreciation expense that can be deducted from taxable income for capital purchases made in 2009. 50% of the amount capitalized after the Section 179 expense is subtracted can be deducted from taxable income. The below is an example* of the significant financial impact the American Recovery and Reinvestment Act of 2009 could have on your business:BEFORE Stimulus Act of 2009
Stone Working Equipment: $450,000Life of Assets in years: 7
Purchase Amount: $450,000
Amount Expensed - Section 179: $128,000
Amount Capitalized after Section 179 Deduction: $322,000
Bonus Depreciation(50% of the amount capitalized under Section 179): Not Available
Regular Depreciation (Calculated on the amount capitalized after Section 179 deduction and bonus depreciation): $46,000
Total Expense Deducted from Taxable Income (Amount Expensed Section 179 + Bonus Depreciation + Regular Annual Depreciation): $174,000
AFTER Stimulus Act of 2009
Stone Working Equipment: $450,000Life of Assets in years: 7
Purchase Amount: $450,000
Amount Expensed - Section 179: $250,000
Amount Capitalized after Section 179 Deduction: $200,000
Bonus Depreciation(50% of the amount capitalized under Section 179): $100,000
Regular Depreciation (Calculated on the amount capitalized after Section 179 deduction and bonus depreciation): $14,286
Total Expense Deducted from Taxable Income (Amount Expensed Section 179 + Bonus Depreciation + Regular Annual Depreciation): $364,286 The effect on—or benefit to—your company depends upon your individual tax situation. Please consult your tax advisor to evaluate this great opportunity and the substantial tax savings this presents.
Need more proof? Try out YOUR ACTUAL dollar amounts with an on-line Excel worksheet right now!
The people at Northland Capital have developed a very nice model of what you could expect with regards to potential benefits of the Economic Stimulus Act in a spreadsheet form. AS ALWAYS, YOU SHOULD CONSULT YOUR FINANCIAL ADVISOR TO VERIFY ANY BENEFITS TO YOUR COMPANY. What this little file can do is give you some "what if" information regarding savings using different amounts. Ready to try out some numbers? Click here.
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