The Economic Stimulus Act of 2008 Spurs Business Investment

A temporary change to the tax code that became effective Feburary 13, 2008, makes it extremely beneficial for businesses to acquire capital equipment - machinery, computers, and other tangible goods, this year. The new legislation provides the following incentives:

Bonus Depreciation - Businesses investing in qualifying equipment can deduct an additional 50% of the cost of their asset in 2008.

Businesses usually prefer to deduct the cost of equipment in a single tax year, rather than deducting a small amount over a number of years.

Increased Expensing - Businesses placing less than $800,00 of equipment into service this year can immediately deduct up to $250,000 (up from $128,000)

The new tax incentive plan for 2008 increases the threshold for capial spending from $510,000 to $800,000, which gives businesses a greater capacity for investment. Businesses that spend less than $800,000 in 2008 on equipment or porperty can now write off up to $250,000 (up from $128,000). The $250,000 deduction begins to phase out when businesses purchase more than $800,000 in 2008.