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Remember that Bobcat machine you have had your eye on for the last few months? Now is the time to buy! Act now to receive the full benefits of the 2008 Economic Stimulus Act.
Improve your cash flow and reduce your tax liability with the 2008 Economic Stimulus Act! The act helps business owners invest in new equipment with a one-time depreciation allowance for certain purchases. By using these enhanced depreciation provisions, you can lower your tax payment and free up cash for your business.
President Bush signed the Economic Stimulus Act of 2008 on February 13, 2008. There are two provisions under the Economic Stimulus Act that provide tax benefits for businesses:
1) Bonus Depreciation: You may qualify to take an additional one time 50% bonus depreciation allowance (in addition to standard depreciation) for purchases made during the 2008 calendar year.
2) Section 179 Bonus: You may qualify to depreciate up to 100% of your equipment cost in one year. Section 179 was designed to dramatically increase the expense limits for the tax year of 2008.
Bonus Depreciation
The Stimulus Act allows certain buyers to take a one-time 50% Bonus Depreciation for their 2008 taxes on new equipment purchased or financed after December 31, 2007 and before January 1, 2009. All companies, regardless of the size of their investment are eligible for the bonus depreciation.
Bonus Depreciation Quick Facts:
- Equipment must be new, purchased and placed in service in 2008.
- To qualify for the bonus, new equipment that is purchased must have a depreciation recovery period of 20 years or less.
- The bonus depreciation does not apply if a binding purchase contract existed prior to 1/1/08.
- The Bonus expires December 31, 2008.
Section 179 Bonus
Under Internal Revenue Code 179, new Bobcat equipment can either be depreciated over its useful life, or expensed immediately. The new Section 179 Deduction limits will have a considerably large impact on your equipment purchases. Now you can write off 100% of your Bobcat equipment purchase up to $250,000, as long as your equipment purchases for the year are less than $800,000. The overall limit is up from $125,000 in 2007, and has increased 95% since 2005.
Section 179 Bonus Quick Facts:
- To be eligible, equipment purchased can be new or used and must be placed in service in 2008.
- If a company’s capital expenditures are greater than $1,050,000, they do not qualify for Section 179.
- Note that every dollar spent over $800,000 is subtracted from the total deduction amount.
- Not applicable if a binding purchase contract existed prior to 1/1/08.
- Save even more, as the Section 179 Bonus can be combined with the Bonus Depreciation!
- The bonus expires December 31, 2008.
The Economic Stimulus Act doesn’t last long, so act fast!
Check out these resources to learn more about your potential savings!
Online Depreciation Calculator:
Click here to use our online Depreciation Calculator to calculate your estimated tax savings! Simply enter the equipment purchase amount and let the calculator do the rest. Please note this is only an estimate. Contact your local tax representative to see how this may apply to you.
Depreciation Bonus Website: www.depreciationbonus.org
This website, sponsored by the Associated Equipment Distributors (AED), is your one stop web clearinghouse for information about the capital investment incentives in the 2008 Economic Stimulus Act.
Bobcat Special Offers
Be sure to review our cash back and special finance offers!
**NOTE: This information is provided by Bobcat as a courtesy to equipment buyers and should not be construed as tax advice or as a promise of potential tax savings or reduced tax liability. Please contact your own CPA or tax attorney to see how this may apply to your situation.
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