US Market: Depreciation Bonus - Time is Running Out

If you are not aware check out the  Depreciation Bonus which will expire at the end of 2008.  \the AED Associated Equipment Distributors put together this website to help you out.  Make sure you check out he calculator on the next page

Depreciation Bonus At A Glance

• The Economic Stimulus Act allows additional first-year depreciation of 50 percent of purchase cost
• Depreciation bonus helps businesses that buy equipment this year cut their 2008 tax bill
• Applies, among other things, to purchases of tangible personal property (including construction, mining, forestry, and agricultural equipment) with a MACRS recovery period of 20 years or less
• Equipment must be purchased and placed in service in 2008
• Equipment must be new
• Not applicable if a binding purchase contract existed prior to Jan. 1, 2008
• Allowed for both regular and alternative minimum tax purposes
• Discretionary - Taxpayer need not claim the depreciation bonus
• Depreciation bonus will expire at end of 2008

Calculator HERE

Sec. 179 Expensing At A Glance

• ESA increases Sec. 179 expensing limit to $250,000 and phase-out cap to $800,000
• Companies can expense up to $250,000 in purchases as long as they don’t spend more than $800,000
• Expensing is phased-out for each dollar that purchases exceed $800,000
• Companies with total purchases of $1,050,000 cannot use Sec. 179
• New and used equipment is eligible for expensing
• Applies to tax years that start in 2008
• Can be combined with depreciation bonus
• Sec. 179 expensing levels will drop at end of 2008 (without ESA, the 2008 expensing amount would be $128,000 and the phase-out level would be $510,000)