Edition 2008.3

Are you taking advantage of the Stimulus Package?

All of us are anxiously waiting for our Stimulus Package rebates. Maybe the rebate will go to purchase some fun goods for the home, or maybe it will be used to pay down some debt. The news in the media regarding the Stimulus Package focuses on what the individual or family will get but there is a great advantage for for businesses as well.

The act, formally called "The Recovery Rebates and Economic Stimulus for the American People Act of 2008" offer many incentives for the business to help boost the economy. The package provides both a 50% first-year bonus depreciation for new capital expenditures - like CMMs - that are ordered and placed into service during 2008, and an increase in how much small businesses can write off under Section 179 for new and used equipment purchases in 2008.

For example, if you are planning on buying a CMM for $75,000 under the standard depreciation schedule you can depreciate 14% of its cost, or $10,500 in the first year. Under the new plan, you will be able to depreciate $48,000: 50% of the $75,000 ($37,500) plus 14% regular depreciation ($10,500).

If you company operates under Section 179, your standard expensing plan is $128,000 but under the new Stimulus Package it increases to $250,00, more than doubling!

If your company has been looking to expand your quality department or shop-floor inspection capabilities, now is a good time. After 2008, this package will expire and the benefit of depreciation reverts back to long term investments. To read about this new bill, click here.