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M.J.M. Capital, Inc.
| 2008 Section 179 Tax Deduction Info |
Want to lower the true cost of ownership on your
business equipment? Here’s how:
business equipment? Here’s how:
Business Equipment
Business owners who acquire equipment including machinery, computers, and
other tangible goods, usually prefer a substantial deduction in a single tax year,
rather than a little at a time over a number of years. This accelerated deduction is
known by its section in the tax code: a Section 179 deduction. The 2008 law
increases the amount of qualified property that a business can expense under
Section 179 to $250,000.This incentive is for equipment placed in service
between December 31, 2007 and January 1, 2009 and is designed for small
companies, so the deduction phases out when a business purchases more than
$800,000 in one year. (Companies cannot write off more than their taxable
income).
Bonus Depreciation 2008
The law passed in 2008 also created a bonus depreciation of 50% for qualifying
assets. This bonus is in addition to regular first-year depreciation.
Benefits of a Non-Tax/Capital Lease
The benefit of a Non-Tax/Capital Lease is that it can take advantage of Section
179: expense up to $250,000 if the equipment is put in use in 2008. In addition,
you may depreciate any excess on the depreciation schedule for that asset.
Examples of Non-Tax/Capital Leases include a $1.00 Buyout, an Equipment
Finance Agreement (EFA), and a 10% Purchase Upon Termination (PUT) Lease.
Example Calculation: Assume you finance $300,000 worth of business
equipment, put it in use in 2008, and take advantage of Section 179. Your tax
savings could be significant:
Business owners who acquire equipment including machinery, computers, and
other tangible goods, usually prefer a substantial deduction in a single tax year,
rather than a little at a time over a number of years. This accelerated deduction is
known by its section in the tax code: a Section 179 deduction. The 2008 law
increases the amount of qualified property that a business can expense under
Section 179 to $250,000.This incentive is for equipment placed in service
between December 31, 2007 and January 1, 2009 and is designed for small
companies, so the deduction phases out when a business purchases more than
$800,000 in one year. (Companies cannot write off more than their taxable
income).
Bonus Depreciation 2008
The law passed in 2008 also created a bonus depreciation of 50% for qualifying
assets. This bonus is in addition to regular first-year depreciation.
Benefits of a Non-Tax/Capital Lease
The benefit of a Non-Tax/Capital Lease is that it can take advantage of Section
179: expense up to $250,000 if the equipment is put in use in 2008. In addition,
you may depreciate any excess on the depreciation schedule for that asset.
Examples of Non-Tax/Capital Leases include a $1.00 Buyout, an Equipment
Finance Agreement (EFA), and a 10% Purchase Upon Termination (PUT) Lease.
Example Calculation: Assume you finance $300,000 worth of business
equipment, put it in use in 2008, and take advantage of Section 179. Your tax
savings could be significant:
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