Besides the Stimulus Checks!
July 7, 2008
The stimulus checks are still coming out as planned and if you have not received yours yet click here: http://goldstardirect.com/tax_tips.cfm?tid=10
#2 - Bonus Depreciation. This is an old law making a comeback. Basically it states that taxpayers are allowed an additional first year writeoff of assets purchased for a business equal to 50% of the purchase price. For example: John Farmer purchases a new combine for his farm operation totalling $100,000. John is automatically entitled to a depreciation deduction of $50,000 plus regular depreciation of $10,000 for a grand total deduction of $60,000! In 2007 his deduction would have been limited to only $10,000. John also would have the option to deduct the entire cost of tractor in 2008 via use of the section 179 deduction described above in #1. Keep in mind that this bonus depreciation is for BRAND NEW assets place in service after December 31, 2007. Brand new means you must be the ORIGINAL user of the asset. This bonus depreciation is not for used equpment or used vehicles. This Bonus depreciation may be just the incentive you need to make that big purchase you have been putting off.
As may have guessed by now, each of the above mentioned changes were designed to spur spending in this depressed economy. Only time will tell if it will help, but in the mean time we may as well use what the government is giving us. If you have any questions regarding either of the above issues please feel free to give me a call at 517-437-4646.
Saul Giminez EA
Gold Star Taxes Inc.