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News THE ECONOMIC STIMULUS ACT OF 2008
News THE ECONOMIC STIMULUS ACT OF 2008
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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 Economic Stimulus Act of 2008 Provides Enormous Tax Depreciation Benefits
On February 13, 2008, President Bush signed the Economic Stimulus Act of 2008. This stimulus package enhanced two tax depreciation programs. The amount of money that can be expensed under Section 179 has nearly doubled from a maximum depreciation of $128,000 in 2007 to $250,000 for 2008. Section 179 allows capital purchases, such as stone equipment, to be deducted from taxable income for capital purchases installed in 2008. This change has resulted in an additional $122,000 in depreciation expense for 2008. 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 2008. 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 Economic Stimulus Act of 2008 could have on your business:BEFORE Stimulus Act of 2008
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 2008
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.
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