Economic Stimulus

Dig Up More Profits... Not Taxes

Let us help you take advantage of the Economic Stimulus Act

Free up cash for your business by dramatically cutting your 2008 tax bill.

How does the depreciation bonus work?
Companies that buy new equipment in 2008 can depreciate 50% of the cost of the first year, plus the percentage of the remaining basis that would ordinarily be depreciated under the Modified Accelerated Cost Recovery System (MACRS).

For Example:
$100,000 - equipment purchase with 5 year MACRS Life
$50,000 - Depreciation Bonus First Year
$10,000 - MACRS Depreciation (20% of remaining $50,000 value)
$60,000 - First Year Depreciation
$21,000 - Tax Benefit ($60,000 x 35% tax rate)
$79,000 - First Year Bottom-Line Equipment Cost

What type of equipment is eligible for the depreciation bonus?

New Equipment purchased between January 1, 2008 and December 31, 2008
Equipment must be placed in service prior to January 1, 2009
Equipment must be depreciable under the MACRS and have a depreciation recovery period of 20 years or less

Can the depreciation bonus be used in combination with Sec. 179 expensing claim?

Yes. Companies eligible for Sec. 179 can combine it with the depreciation bonus for even bigger tax savings.
Unlike the depreciation bonus, Sec. 179 expensing can be applied to both new and used equipment.
For the 2008 tax year, companies can expense up to $250,000 under Sec. 179 as long as total purchases do not exceed $800,000

Where can I find more on the depreciation bonus?
You can visit www.depreciationbonus.org

Is there an easy way to calculate my depreciation bonus?
You can visit www.depreciationbonus.org/calculator.aspx for further assistance.