Start Stimulating Your Economy.

Code Section 179 provides incentives to business owners to invest in qualified equipment or property by allowing businesses to deduct additional depreciation of those investments in the first year, in addition to the Standard Depreciation (MACRS) deduction. This increases your tax benefit the first year your equipment is acquired and placed into service.

Commercial taxpayers who own qualified equipment for business purposes may now be able to deduct up to $250,000 of the value of the equipment. They may also qualify for 50% bonus depreciation in addition to the standard first-year MACRS deduction on the remaining amount.

Qualified business assets include machinery, equipment, furniture, fixtures and off-the-shelf software. If you acquire more than $800,000 of qualified business assets during the tax year, your Section 179 deduction decreases by $1 for each additional dollar you spend on qualified business assets.

By using the Section 179 deduction you can lower your tax payments, freeing up cash for other business needs.

The Economic Stimulus Act Can Work For You.

Equipment with a price of $400,000
and a useful life of 5 years


a. Total eligible assets $400,000
b. Section 179 deduction $250,000
c. 50% bonus depreciation $75,000
(a-b) x 50%
d. 1st year depreciation (MACRS) $15,000

Total 1st year tax deduction $340,000
Equipment with a price of $35,000
and a useful life of 5 years


a. Total eligible assets $35,000
b. Section 179 deduction $35,000
c. 50% bonus depreciation 0
(a-b) x 50%
d. 1st year depreciation (MACRS) $35,000

Total 1st year tax deduction $35,000
(b+c+d)
Equipment with a price of $850,000
and a useful life of 5 years


a. Total eligible assets $850,000
b. Section 179 deduction $200,000
($250,000 to$50,000 phase out amount
over $800,000)
c. 50% bonus depreciation $325,000
(a-b) x 50%
d. 1st year depreciation (MACRS) $65,000
Total 1st year tax deduction $590,000
(b+c+d)

To learn more about how you and your customers can benefit from the Economic Stimulus Act of 2008, contact your tax professional or click here.


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