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 your business this year a very attractive option.
How attractive? Use the below 2008 Section 179 Allowance Calculator to see how much you can save on new equipment purchases in 2008.
In 2008, Section 179 allows you to write off the full purchase price of equipment purchases ( up to $250,000) and also allows a first-year bonus 50% depreciation for any over-limit equipment.
This allows for immediate tax relief, and makes leasing equipment and investing in your business not only feasible, but a financially sound decision as well.
They can look even better with the right equipment financing. At Crest Capital, we can structure an equipment Lease or Loan that allows you to take advantage of the new 2008 limits in Tax Code Section 179 and expense the equipment cost up to the amount allowed for 2008. You may even depreciate any excess – first with the new 50% depreciation, and then on the depreciation schedule for that particular asset. In many cases, your savings will exceed your first year's payments on the equipment.
Contact Crest Capital for a free Equipment Lease Consultation, or read on to learn more about Section 179.
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.
There are some limits to section 179 - the total cost of property that may be expensed cannot exceed the total amount of taxable income during the tax year. And not all states follow federal law; contact your tax advisor for further details.
Most types of business equipment qualify for the Section 179 expensing allowance, including:
Generally, most movable assets qualify – but permanent structures do not qualify for Section 179. Even used equipment and vehicles qualify if they are new to you. In other words, if you acquire the equipment from a source other than yourself or an entity controlled by you, it should qualify. To ensure property qualifies, please reference Publication 946.
You must act now to take advantage of these new, substantial incentives. Contact Crest Capital for a free consultation.
Tax Code Section 179 is an expense deduction provided for taxpayers who elect to treat the cost of qualifying property (Section 179 property) as an expense rather than a capital expenditure. The election, which is made on Form 4562, is for the tax year the property was placed in service. Under Section 179, equipment purchases, up to the amount approved for a given year, can be deducted from taxable income – if installed by December 31st. For further detail, contact your tax advisor or visit www.irs.gov and reference Form 4562.
Click here for the 2009 Section 179 allowance calculator and information pertaining to this year.
Click here for the 2007 Section 179 allowance calculator and information pertaining to last year.
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