Tax Guru-Ker$tetter Letter

Friday, February 08, 2008

Section 179 almost doubled for 2008

As I had been predicting, the economic stimulus program from our rulers in DC includes a very generous increase in the maximum Section 179 deduction. All of the media attention regarding the stimulus bill has been on the tiny rebates and they have overlooked and ignored this very substantial tax break for small businesses.

Here is how it is explained in the recent Spidell Flash E-mail:

On February 7, 2008 both the Senate and House of Representatives passed H.R. 5140, the Economic Stimulus Act of 2008 (the Act), which the President is expected to sign. The Act contains provisions pertaining to tax rebates and depreciation.

Increased §179 plus first year bonus depreciation

For tax years beginning in 2008, the Act increases the $128,000 §179 expensing limit to $250,000 and boosts the overall investment limit from $510,000 to $800,000.

In addition, the Act generally permits a bonus first-year depreciation deduction of 50% of the adjusted basis of qualified property acquired and placed in service after December 31, 2007, and before January 1, 2009.

Here is how Spidell explains the rebates for those not classified as evil rich by our DC rulers:

Based on 2007 returns, a rebate of up to $600 would go to single filers with AGI of $75,000 or less ($1,200 for married filing joint with AGI of $150,000 or less). In addition, parents would receive $300 rebates per child. Tax filers who do not owe income taxes but have at least $3,000 in qualifying income would get a $300 rebate. The rebates are phased out by 5% of income in excess of the threshold amounts.

The IRS is expected to start sending out checks in early May with all rebates completed by mid-summer, according to Treasury Secretary Henry Paulson.

Labels: 179

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 2/08/2008 05:41:00 PM Send this post: