Economic Stimulus Act of 2008
On February 7, 2008, Congress passed, and the President is expected to sign,
the Economic Stimulus Act of 2008. The major intent of this bill is to get
tax rebate checks into the hands of consumers who will spend them and
stimulate the economy.
Individuals will receive a tax rebate check of up to $600; married couples
would receive up to $1,200. In addition, $300 will be received for each
child under the age of 17. There is an income limitation relating to these
rebates. The rebates will be reduced by 5 percent of the amount that 2007
adjusted gross income exceeds $75,000 for individual and $150,000 for joint
filings. Individuals must file their 2007 income tax return prior to being
entitled to the rebate check.
In addition to the rebates, the bill offers tax benefits to businesses. A
business may elect to expense, under Section 179 of the Internal Revenue Code,
up to $250,000 of the cost of depreciable tangible personal property placed
in service in a taxable year beginning in 2008. The property must be used in
the active conduct of a trade or business. There is a dollar-for-dollar
reduction in the allowable expense if qualifying property in excess of
$800,000 is placed in service in the taxable year. The prior limitation
applies for tax years beginning in 2009 and thereafter.
A first-year bonus depreciation deduction on qualified tangible personal
property acquired and placed in service during 2008 is provided for in the
act. The depreciation deduction otherwise allowed on qualified property
during that period is increased by 50 percent of the cost of such property.
This applies to both regular tax and alternative minimum tax.
Please
contact us if you would like to
discuss how the Economic Stimulus Act of 2008 will affect you.
Wherewithal
is provided by Somerset for our clients and other interested persons
upon request. Since technical information is presented in generalized
fashion, no final conclusion on these topics should be made without
further review. For additional information on the issues, please
contact
a member of the firm. Somerset provides total financial solutions,
including accounting, assurance, information solutions, litigation &
valuation, tax, wealth management and management consulting services to
entrepreneurs and their businesses. This document is not intended or
written to be used, and cannot be used, for the purpose of avoiding tax
penalties that may be imposed on the taxpayer.
Somerset CPAs,
P.C.
3925 River Crossing Parkway, Third Floor
Indianapolis, Indiana 46240
317.472.2200 • 800.469.7206 • FAX 317.208.1200
www.somersetcpas.com
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