It’s a Good Time to Buy Business Assets

The current economic slowdown has many entrepreneurs reducing business spending, especially on big ticket capital improvement items. Recently, the Economic Stimulus Act of 2008 created spending incentives by allowing businesses to significantly accelerate cost recovery for equipment placed in service in calendar year 2008.

Previously, a business that purchased new equipment could deduct only up to $128,000 of qualifying equipment purchases. The ACT almost doubled that expense limit to $250,000.

The Act also provides a higher first-year bonus deduction – an amount equal to 50% of the adjusted basis for qualified property.

Other incentives to place assets in service in 2008 include revisions to rules on corporate vehicle deductions. For business owners utilizing corporate cars, the Act increased the luxury auto depreciation limit from $2,960 for passenger vehicles to $10,960. The depreciation limit for vans and trucks was similarly increased by $8,000.

These are just some of the recent benefits provided by the Economic Stimulus Act of 2008 to small business owners. To determine whether your business can take advantage of these higher write off amounts, consult a CPA familiar with the details of your business operations.