Fast Shipment! Guaranteed shipping in 2 weeks!

New Tax Incentives Liquid Packaging Solutions

2008 Economic Stimulus Package

In February of 2008, President Bush signed into law the Economic Stimulus Act of 2008. This Act includes new tax incentives that may help lower the cost of investing in new equipment. The two main provisions are outlined below:

SECTION 179 – EXPANDED EXPENSING FOR SMALL BUSINESSES

Any company that purchases less than $800,000.00 of capital assets in a year can now expense the first $250,000 of capital investment. This expensing is effective for purchases made in 2008. For example, a qualifying business that buys a $250,000 machine in 2008 can deduct the total cost of the equipment the same year that it is purchased!

ACCELERATED DEPRECIATION FOR ALL BUSINESSES

The Economic Stimulus Act of 2008 also includes a new 50% expensing allowance for capital equipment purchases and placed in service during 2008. This incentive generally applies across the board, regardless of company size or the amount of the investment. Using the accelerated depreciation, companies are now eligible for first year depreciation totaling 50% of the cost of their investment. The remaining amount would fall under the regular rules of depreciation.

The law itself outlines the type of property that will qualify for the accelerated depreciation. The property must be one of the following types:

  1. Property to which the general rules of MACRS apply having a recovery period of 20 years or less;
  2. Water Utility Property;
  3. Computer software other than that recovered under Section 197; or
  4. Qualified leasehold improvement property.

Also, the “original use” of the property must commence with the taxpayer after December 31st, 2007. In other words, the taxpayer must be the original user of the property and the taxpayers first use of the property must occur after the above stated date. Thirdly, property must be purchased between December 31,2007 and January 1, 2009 in order to qualify. And finally, the property must be placed in service between these same dates.

Smaller companies can take advantage of BOTH provisions noted above, which allows for even more tax incentives.

For more information, click on the following link: Economic_Stimulus_Package.pdf