ECONOMIC STIMULUS: Happy holidays from Uncle Sam
Did you know that the US Government would like to fund a large percentage of your new infrastructure, phone system or security solution? You don’t have long to act. Unless current law is extended, the older limits will go back into effect for 2009.
On February 13, 2008, the Economic Stimulus Act was passed, which expanded the Section 179 deductions available to businesses. Section 179 allows businesses to deduct the full cost of qualifying equipment purchased or leased during the tax year. The 2008 limit on Section 179 equipment deductions is $250,000 (doubled from $125,000 in 2007). The deduction begins to phase out dollar-for-dollar after $800,000 of purchased equipment. In addition to the Section 179 write-off, you can take 50% “bonus” depreciation on first year equipment purchases.
Here is an example to illustrate the deduction benefits:
2008 equipment purchase
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$400,000
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179 deduction
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$250,000
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Bonus depreciation
$400k - $250k = $150k
$150k x 50% = $75k
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$75,000
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Normal 1yr depreciation
Remaining $75k tax basis
$75k x 25% = $15k
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$15,000
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TOTAL 1yr deduction
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$340,000
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Tax savings
Assume 35% tax rate
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$119,000
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TOTAL equipment cost
Compared to purchase price of $400k |
$281,000 |
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| The example above assumes certain existing optimum circumstances. Each taxpayer should consult with his or her own tax advisor as to any restrictions which may apply to their own circumstances.
Leverage this tax law before it's too late!
Call 916-577-1711 or email SOS to discuss your technology needs. We have resources available to design, quote, order and implement a solution to suite your business and financial needs. Our customers have experienced ROI within 6-18 months. We always design solutions to resolve business needs, ensuring the technology produces hard cost savings for your business.
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