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On Feb. 17,
2009 President Obama signed the American Recovery and Reinvestment Act
(ARRA) into law. It includes significant incentives to encourage
equipment purchasing this year. You can finance the equipment and still
take advantage of Section 179.
Sec.
179 Expensing at a Glance
 | Sec. 1202
of the ARRA extended for one year the increased Sec. 179 expensing
limit of $250,000 and phase-out cap to $800,000. |
| Companies
can expense up to $250,000 in purchases as long as they don't spend
more than $800,000. |
| Expensing
is phased-out for each dollar that purchases exceed $800,000. |
| Companies
with total purchases of $1,050,000 cannot use Sec. 179. |
| New and
used equipment is eligible for expensing. |
| Applies
to tax years that start in 2009. |
| Can be
combined with depreciation bonus. |
| Sec. 179
expensing levels will drop at end of 2009 (without ARRA, the 2009
expensing amount would be around $130,000 and the phase-out level
would be around $500,000). |
Depreciation Bonus at a Glance
| Sec. 1201
of the 2009 American Recovery and Reinvestment Act (ARRA) allows
additional first-year depreciation of 50 percent of purchase cost by
extending for one year the depreciation bonus created by the 2008
Economic Stimulus Act. |
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Depreciation bonus helps businesses that buy equipment this year cut
their 2009 tax bill. |
| Applies,
among other things, to purchases of tangible personal property
(including construction, mining, forestry, and agricultural equipment)
with a MACRS recovery period of 20 years or less. |
| Equipment
must be purchased and placed in service in 2009. |
| Equipment
must be new. |
| You may
not claim the depreciation bonus for 2009 if a binding purchase
contract existed prior to Jan. 1, 2009 (but you may be eligible for
the 2008 depreciation bonus check with your accountant). |
| Allowed
for both regular and alternative minimum tax purposes. |
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Discretionary - Taxpayer need not claim the depreciation bonus. |
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Depreciation bonus will expire at end of 2009. |
Find below a
link to Depreciation Bonus for more information and a 2009 Depreciation
Bonus Calculator.
http://www.depreciationbonus.org/
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