The Economic Stimulus Act passed by Congress in February includes two important provisions that may significantly lower the cost of investing in new equipment for your business. The first provision raises the expensing limit to $ 250,000 for companies that purchase less than $ 800,000 in capital assets. That is an increase of over $ 120,000 from the previous expense limit. The second allows for a 50 percent “bonus” depreciation provision that will benefit businesses of all sizes.
To qualify for the accelerated depreciation deduction, several criteria must be met, which can be found in detail at the official website for the House of Representatives. In relation to the purchase of Legiant Time and Attendance computer software, your business may be eligible to utilize this depreciation deduction if your original use of the product and purchase of the product did not commence before January 1, 2008. If you have not yet purchased Legiant Timecard, as long as the purchase is made before the end of the year your business may be able to use this provision.
An example of accelerated depreciation for all businesses:
“Assume that in 2008, a taxpayer purchases new depreciable property and places it in service.14 The property’s cost is $ 1,000, and it is five-year property subject to the half-year convention. The amount of additional first-year depreciation allowed under the provision is $ 500. The remaining $ 500 of the cost of the property is deductible under the rules applicable to five-year property. Thus, 20 percent, or $ 100, is also allowed as a depreciation deduction in 2008. The total depreciation deduction with respect to the property for 2008 is $ 600. The remaining $ 400 cost of the property is recovered under otherwise applicable rules for computing depreciation.”
The example listed above was provided by the Joint Committee on Taxation, Technical Explanation of the Revenue Provisions of H.R. 5140, the “Economic Stimulus Act of 2008″as passed by the House of Representatives and the Senate on February 7, 2008. (JCX-16-08), February 8, 2008. This document can also be found on our website at www.house.gov/jct.
This article does not provide legal, tax, or other advice from Legiant. You should consult your tax advisor for more complete information.
Legiant is a leading provider of web-based time and attendance and time accounting systems for payroll, attendance, productivity, leave and project tracking. Flexible productivity time tracking solutions help Legiant’s enterprise customers maximize the profitability and productivity of their workforce. Legiant solutions can be customized to meet the unique needs of any organization including mobile workforce tracking, payroll automation or automated time and attendance and workforce productivity reporting. Legiant integrates software, hardware, and professional services to create a comprehensive accounting solution, easy-to-use and accessible from anywhere through a Web-based interface.