Good news - the Senate approved H.R. 5140, the “Economic Stimulus Act of 2008” (the Stimulus Act) as passed by the House of Representatives. President Bush has shown every inclination to sign this into law soon. What impact this will have on a sluggish economy in wake of the sub-prime mortgage crisis remains to be seen. Following is a summary of the Stimulus Act's tax provisions: Individuals: Much like the rebates of 2001, you will not receive a rebate until you file your 2007 tax return and the rebate won't be available if an individual's tax return does not include valid Social Security Number(s). Businesses & Business owners:
Increased Sec. 179 expensing - Under current law, taxpayers can expense up to $128,000 for qualified purchases of depreciable business use property. The amount of this deduction is limited to the amount of taxable income from any of the taxpayer's active trades or businesses. For tax years beginning in 2008, the Stimulus Act will increase the $128,000 expensing limit to $250,000 and increase the overall investment limit from $510,000 to $800,000.
For 2008, first-year bonus depreciation returns - First year bonus depreciation was first allowed in 2001 but under current law generally isn't available for property acquired after 2004. The Stimulus Act will generally permit a bonus first-year depreciation deduction of 50% of the adjusted basis of qualified property acquired and placed in service after Dec. 31, 2007, and before Jan. 1, 2009.
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