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M.J.M. Capital, Inc.
Equipment Leasing
Equipment Leasing
| 2008 Section 179 Tax Deduction Info - Page 2 |
The sample calculation shows how taking advantage of Section 179 can
significantly lower the true cost of equipment ownership from $300,000 to
$202,000.
significantly lower the true cost of equipment ownership from $300,000 to
$202,000.
Equipment Cost Example: $300,000
1st Year Write Off: $ 250,000
($250,000 is the maximum Section 179 write-off in 2008)
50% Bonus Depreciation $ 25,000
(On remaining value: $300,000 - $250,000 = $50,000; $50,000 x 50% =
$25,000)
Normal 1st Year Depreciation: $ 5,000
(Depreciation calculated at 5 years = 20%; $25,000 x 20% = $5,000)
Total 1st Year Deduction: $ 280,000
($250,000 + $25,000 + $5,000 = $280,000)
Tax Savings Assuming Rate of 35%: $ 98,000
($280,000 x .35 = $98,000)
1st Year Net Cost after Tax Savings: $ 202,000
1st Year Write Off: $ 250,000
($250,000 is the maximum Section 179 write-off in 2008)
50% Bonus Depreciation $ 25,000
(On remaining value: $300,000 - $250,000 = $50,000; $50,000 x 50% =
$25,000)
Normal 1st Year Depreciation: $ 5,000
(Depreciation calculated at 5 years = 20%; $25,000 x 20% = $5,000)
Total 1st Year Deduction: $ 280,000
($250,000 + $25,000 + $5,000 = $280,000)
Tax Savings Assuming Rate of 35%: $ 98,000
($280,000 x .35 = $98,000)
1st Year Net Cost after Tax Savings: $ 202,000
For the specific impact to your company, please contact your tax
advisor.
For complete details, or changes to the tax incentives, please visit
www.irs.gov or contact the IRS helpline at: 800-829-4933
advisor.
For complete details, or changes to the tax incentives, please visit
www.irs.gov or contact the IRS helpline at: 800-829-4933