Business Benefits of the 2008 Economic Stimulus Act

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On February 21, 2008 the Internal Revenue Service released IR-2008-22 which details the benefits for businesses included in the 2008 Economic Stimulus Act. The two main provisions included in the stimulus package for businesses are fifty percent special depreciation allowance and an increase in section 179 expensing limits.

The fifty percent special depreciation allowance or bonus depreciation allows qualifying taxpayers to take a current year depreciation expense up to fifty percent on qualified property. Generally the property must have been placed in service in calendar year 2008. Fiscal year filers will need use form 4562-FY.

For 2008, the amount of section 179 property allowed to be expensed for qualifying taxpayers has been increased to $250,000 from $128,000 under the prior legislation. Note, not all items qualify for the increase expense limits and other limits and restrictions apply.

IR-2008-22 can be found on the IRS website at http://www.irs.gov/newsroom/article/0,,id=179227,00.html. The Internal Revenue Service has also added an Economic Stimulus Payments Information Center to its website. The Economic Stimulus Payments Information Center can be found at http://www.irs.gov/irs/article/0,,id=177937,00.html.

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William B. Riccio, CPA/CITP is a certified public accountant. He is president of Riccio & Associates and can be reached at (216) 255-6913 or by e-mail at william@ohiocpa.net