| As a business owner, the Economic Stimulus Act that | | | | mentioned above. A child care provider doesn't need |
| Congress has passed contains an important | | | | as much equipment as the brain surgeon, and |
| component that can affect your cash flow. This | | | | certainly won't spend the same amount on the |
| component of the Act states that business owners | | | | equipment either! However, a child care provider |
| who purchase and put into use new equipment in | | | | could purchase a new piece of play equipment, such |
| 2008 will be able to claim an additional 50% in | | | | as a swing set, jungle gym, or trampoline, and could |
| depreciation on that equipment on their 2008 taxes! | | | | claim these items as depreciable expenses on their |
| That can mean a huge tax savings to you! Congress | | | | 2008 taxes. The provider would then be able to claim |
| is hoping that this act will spur on business owners to | | | | an additional 50% depreciation deduction on these |
| purchase equipment now, which will help to stimulate | | | | items in the 2008 tax year! Other pieces of |
| the economy. | | | | equipment that may qualify for the depreciation |
| Let's take a closer look at the Act itself. As stated | | | | deduction for the home daycare provider are |
| above, you must purchase AND put into use the | | | | computers, computer accessories, and large |
| new equipment in the year 2008. That means that | | | | appliances. Now let's look at a small corporation, say a |
| this act won't apply to custom ordered equipment | | | | computer consulting company. This company could |
| that you won't receive and put into use until 2009. It | | | | use this opportunity to purchase new servers, large |
| also means that the sooner you purchase your | | | | software packages, or new computer equipment |
| equipment, the better! That way you are ensured of | | | | that would qualify for the depreciation deduction. |
| having your equipment delivered and operational in | | | | Whether they purchase one computer or five |
| 2008. There is also no limit on the number of | | | | servers, they can take the deduction on each item |
| equipment purchases that you can apply to this | | | | purchased. Finally, a large corporation, a construction |
| credit in 2008. So you could make one equipment | | | | company for example, could use this opportunity to |
| purchase or ten purchases! Of course, the equipment | | | | purchase a new bulldozer, new communications |
| must qualify for depreciation in your business in order | | | | equipment, and/or new computer equipment. This |
| to qualify for the deduction. In general, more costly | | | | Economic Stimulus Act becomes especially beneficial |
| equipment that will be in use long term in your | | | | to a business owner such as the brain surgeon we |
| business will qualify for depreciation. This means that | | | | mentioned above. Physicians and medical providers |
| there is a great deal of latitude regarding which types | | | | often need to purchase costly medical equipment. |
| of equipment will apply. If you aren't sure what types | | | | The depreciation deduction they can receive by |
| of equipment would apply for your particular situation, | | | | purchasing the equipment and putting it to use in |
| speak to your accountant. The great thing is that this | | | | 2008 could make the purchase that much more |
| opportunity will apply for all types of business | | | | worthwhile. |
| owners. That means that everyone from the home | | | | With the passing of this new Economic Stimulus Act, |
| daycare provider to the brain surgeon can take | | | | business owners are finally receiving a much needed |
| advantage of this opportunity. Obviously, the more | | | | break when it comes to their finances. Since this |
| costly the equipment purchase, the larger the | | | | deduction is only good for the 2008 year, it just |
| depreciation deduction will be. | | | | doesn't make good financial sense to wait until next |
| What can this mean for the average business | | | | year to make that equipment purchase. Do it now, |
| owner? Consider a business owner that is a Sole | | | | while you can still receive the tax benefits! |
| Proprietor, the home child care provider we | | | | |