T.R. Wigglesworth Machinery Co. wants you to know about tax benifits
http://www.wigglesworth.com/display.cfm?p=134
NEWS - 2008 Economic Stimulus Act Provides Tax Benefits for Equipment
To reflect the new 50-percent special depreciation allowance, the IRS is developing a new version of the depreciation and amortization form for fiscal year filers. The new form will be designated as the 2007 Form 4562-FY.
Qualifying Property-
Machine Tools?
Generally, the types of business equipment that qualify for this expensing election are the same kind that qualified for the now-defunct Investment Tax Credit. Most movable assets qualify. Permanent structures do not qualify. Business vehicles with a gross vehicle weight over 6,000 pounds qualify for the full Sec. 179, while lighter vehicles have a much lower dollar limit.
Some examples of qualifying property from the Depreciation QuickFinder Handbook:
• Machinery and equipment.
• Airplanes.
• Automobiles.
• Off-the-shelf computer software.
• Oil and gas well and drilling equipment.
• Printing presses.
New and Used Machine Tools ?
One of the most common questions I am still receiving is whether the Section 179 expensing election is only available for the purchase of brand new assets or whether things such as used vehicles qualify. The answer is still the same. The asset just has to be new to you. You can claim the deduction for items purchased from anyone other than yourself or an entity controlled by you, such as a closely held corporation.
The following information is a reproduction of content provided on the Internal Revenue Service Website –
http://www.irs.gov/newsroom/article/0,,id=179227,00.html
IR-2008-22, Feb. 21, 2008
WASHINGTON — In addition to providing stimulus payments to individuals, the Economic Stimulus Act of 2008provides incentives to businesses. These incentives include a special 50-percent depreciation allowance for 2008 purchases and an increase in the small business expensing limitation for tax years beginning in 2008.
50-Percent Special Depreciation Allowance
Depreciation is an income tax deduction that allows a taxpayer to recover the cost or other basis of certain property over several years. It is an annual allowance for the wear and tear, deterioration or obsolescence of the property.
Under the new law, a taxpayer is entitled to depreciate 50 percent of the adjusted basis of certain qualified property during the year that the property is placed in service. This is similar to the special depreciation allowance was previously available for certain property placed in service generally before Jan. 1, 2005, often referred to as “bonus depreciation.” To qualify for the 50 percent special depreciation allowance under the new law, the property must be placed in service after Dec. 31, 2007, but generally before Jan. 1, 2009.
To reflect the new 50-percent special depreciation allowance, the IRS is developing a new version of the depreciation and amortization form for fiscal year filers. The new form will be designated as the 2007 Form 4562-FY.
Section 179 Expensing
In general, a qualifying taxpayer can elect to treat the cost of certain property as an expense and deduct it in the year the property is placed in service instead of depreciating it over several years. This property is frequently referred to as section 179 property, after the relevant section in the Internal Revenue Code.
Under the new law, a qualifying business can expense up to $250,000 of section 179 property purchased by the taxpayer in a tax year beginning in 2008. Absent this legislation, the 2008 expensing limit for section 179 property would have been $128,000. The $250,000 amount provided under the new law is reduced if the cost of all section 179 property placed in service by the taxpayer during the tax year exceeds $800,000.
The new law does not alter the section 179 limitation imposed on sport utility vehicles, which have an expense limit of 25,000.
Do I have to pay cash for the equipment to be eligible for the stimulus depreciation schedule or can I finance it?
How you finance the equipment does not matter!
Financing of asset has no effect on Section 179 deduction
More on the subject –
2008 Economic Stimulus Act
2008-stimulus-package.pdf
http://www.moneysourceinc.com/favicon.ico
T.R. Wigglesworth Machinery Co.
7100B Krick Road
Bedford, Ohio 44146
