Section 179

2008 has suddenly become a great year to invest in your business. This is due to The Economic Stimulus Act of 2008, which has significantly increased your purchasing power when it comes to buying new equipment under Tax Code Section 179.

In fact, the deduction limits have almost doubled for 2008, and there is a new one-time bonus 50% depreciation once that limit is reached, making investing in most businesses this year a very attractive option.

More on Tax Code Section 179 (and what has changed for 2008)
When acquiring new equipment, including machinery, computers and other tangible goods, you would obviously prefer to deduct the entire cost this tax year (2008), rather than a little at a time over a number of years. Section 179 essentially allows just that – you can deduct, from your taxable income, the full amount of equipment purchases up to the approved limit for a given year (almost doubled to $250,000 for 2008). Of course, this assumes the equipment is installed during the calendar year.

In addition, depending on the equipment and specific scenario of the business, any excess equipment cost above the amount expensed under Section 179 can be depreciated. And again, 2008 has brought substantial changes – you can now depreciate a full 50% for the first year.

Section 179 is a small business incentive for capital spending, which accelerates the economy and has a profound impact on our business (equipment finance). This is due to tangible goods financed by equipment loans or by most types of equipment leases (Non-Tax or Capital Leases) qualify for this deduction.

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