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Stimulus tax bill and small business
February 14, 2008

Small businesses will receive some tax benefits under the economic stimulus bill signed into law by President Bush yesterday.

A key provision of the bill is an expansion of “bonus appreciation” which allows investments in tangible property, computer software, or improvements to leased property to be more speedily appreciated, leading to tax savings for businesses. Businesses of all sizes will be allowed to depreciate in this tax year 50 percent of the cost of an asset put into use in 2008.

CNNMoney.com also reported that another provision in the bill will increases the level of the “Section 179” deductions that small businesses can expense instead of depreciate. This language allows businesses with up to $800,000 in annual revenues to deduct investments in tangible business purchases (not including buildings, but including computer software) of up to $250,000 instead of depreciating them. The caps, CNN says, are increases from the $500,000 annual revenue maximum and $125,000 deduction limit currently under law.

A third provision proposed by the Senate that would have allowed businesses to deduct operating losses against income from as far back as five years was dropped from the bill. Click here for further information.

Posted by Jack Keough on February 14, 2008 | Comments (1)