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March 18, 2008
Want to take advantage of the benefits of the Economic Stimulus Act? Now's the time to invest in capital equipment.
According to NPES, The Assn. for Suppliers of Printing, Publishing and Converting Technologies, the economic stimulus package passed by Congress and signed into law by President Bush last month provides huge investment incentives for converting equipment sold and installed before 2009. But time's awasting...
The act gives a 50% bonus depreciation on new equipment purchased after Dec. 31, 2007, and installed before Jan. 1, 2009. It also nearly doubles the limit on capital investment this year that can be expensed, raising it to $250,000 for companies that purchase less than $800,000 of capital assets in 2008.
But remember, the "placed-in-service" date for qualifying equipment purchases is vital to the effectiveness of these tax incentives, warns NPES. Large capital-equipment systems need more leadtime for engineering and installation than is typical for smaller buys.
Here's one example of how the Act can work for you, according to NPES. Say you purchase a laser digital-converting (diecutting) system at $400,000 (without the tax cut). By adding up the new expensing provision of $250,000, plus the new 50% bonus first-year depreciation of $75,000, plus regular depreciation of $10,500 = $335,500 of total first-year depreciation. Your tax savings would be $135,000 for a new effective price on that system of only $265,000. Of course, here comes the legalese: "Consult your tax advisor regarding specific circumstances and transactions."
But either way, the Economic Stimulus Act can help your business, and in a lot more ways than just that extra $600 in your pocket for personal income taxes.
Posted by Mark Spaulding on March 18, 2008 | Comments (0)