By now, most individual taxpayers have received checks that range from $600 to several thousand dollars depending on marital status and the number of dependents. But the benefits of another major part of the recent economic stimulus package have received far less attention and aren’t so easy to estimate. So the Small Business Administration has launched a tax savings resource center to help businesses understand the benefits.
The economic stimulus law provides a 50 percent bonus depreciation allowance on equipment purchased and placed in service in calendar 2008 and an increase of nearly 100 percent – from $128,000 to $250,000 – in the amount that a business can expense for equipment purchased and placed in service in the business tax year beginning in 2008.
“The stimulus package is designed to spur the economy by putting money back into the pockets of American workers and encouraging small businesses to invest and expand,” said SBA Acting Administrator Jovita Carranza. “However, many small business owners are unaware of how it could boost their bottom line. In the roundtables I held with dozens of small business owners last week on tax policy, many were amazed to learn how much their companies could benefit from the temporary tax incentives in the package.”
SBA’s tax savings resource center at www.sba.gov/stimulus includes a fact sheet explaining the tax benefits, a depreciation calculator and an online seminar. SBA cautions, however, that due to exceptions and additional requirements, businesses should contact their tax advisers before completing any transactions based on the assumption they will the receive the tax benefits.
The Internal Revenue Service also has issued a fact sheet outlining the business-related provisions of the economic stimulus package. To view the fact sheet, go to www.irs.gov and search for FS-2008-21.
