What are the Favorable Business Incentives under Economic Stimulus Act of 2008
The Economic Stimulus Act of 2008 had a provision in the law that provided a very favorable incentive to businesses. The provision provided 2 major changes to the existing depreciation rules as shown below;
1. A 50% bonus deduction on new equipment that was purchased in 2008 that would normally be depreciated over several years.
2. The section 179 Deduction expense has been raised from $125,000 to $250,000 of eligible equipment purchased in 2008 and increases the threshold for reducing the deduction to $800,000. It applies to property purchased and placed in service in tax years beginning in 2008.
Clearly, both of these provisions will provide a positive stimulus to the investment activity and could result in a more robust economy.