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The 2008 USA Economic Stimulus Act provides companies an
opportunity to save thousands on taxes
By purchasing new production equipment, such as a ROMER Portable CMM,
ScanShark Laser Inspection System, Leica Laser Tracker, Leica Total Station, Leica Theodolite, GridLOK system, and more, your company could save thousands off
their 2008 tax bill.
Before the 2008 Economic
Stimulus Act, a business could deduct up to $128,000 of the cost of qualified
equipment purchases. If the business
purchased more than $510,000 of qualified equipment during the year this amount
was reduced. Now thanks to the 2008
Economic Stimulus Act these amounts have almost doubled. For 2008, a
business can now deduct up to $250,000
of the cost of qualified equipment purchased in 2008 from their taxable income.
If the cost of qualified equipment purchased during 2008 exceeds $800,000 this
amount is reduced. This $250,000
deduction is phased out on a dollar-for-dollar basis between $800,000 and $1,050,000.
In addition to the above
expensing election the Economic Stimulus Act also allows for a special 50% bonus depreciation on certain
assets placed in service before January 1, 2009. In order to be eligible for
this bonus depreciation the assets' original use must occur during 2008.
After reducing the basis of
the assets placed in service during 2008 by the above amounts claimed, companies
can take the standard depreciation on the adjusted basis of qualified
equipment. Coordinate Measuring Equipment is
typically depreciated over 7 years.
Tax Savings Example:***
Cost of Equipment $500,000.00
Section 179 Deduction
-$250,000.00
50% Bonus Depreciation -$125,000.00
Standard Depreciation
- 17,863.00
Estimated Write-Off $392,863.00
Cash Savings on your
Equipment Purchase
$137,502.00
(Assuming a 35% Tax Bracket)
***The above statement and calculations are not intended
to be tax advice. You should check with your tax advisors with regard to the
applicability of the above statements.
2008_section_179_tax calculator, provided by our financing provider, National Machine Tool Financial.
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