On Feb. 13, President Bush signed the Economic Stimulus Act (the “Act”), thereby temporarily reinstating the depreciation bonus and increasing Sec. 179 expensing limits. 

Under the new law, companies that buy equipment in 2008 can depreciate an additional 50 percent of the cost in the first year.  To be eligible for bonus depreciation, the equipment must be new and placed in service before Jan. 1, 2009. 

Under the Act, Companies may now immediately expense $250,000 of their 2008 eligible capital expenditures, a significant increase over former limits.  For each dollar over an $800,000 threshold, the eligible expensing amount correspondingly drops by one dollar.  Thus, companies that spend less than $1,050,000 on tangible personal property may be able to take advantage of the increased Section 179 limits. Section 179 rules apply to both new and used property and, where eligible, may be combined with *bonus depreciation.

An example of how this important economic stimulus act could work is provided in a
pdf file. Click here to view the example.

A wealth of information about the 2008 Economic Stimulus Act. Just a mouse-click away. Click here >>