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The American Recovery and Reinvestment Act of 2009 (the Recovery Act), which was signed into law by the President in February, includes many tax breaks for businesses. There are a couple worthy of note.
- Bonus Depreciation
The new law extends the 50% first-year bonus depreciation allowed under the 2008 Economic Stimulus Act (2008 ESA) through December 31, 2009. The extension is retroactive to January 1, 2009. This only applies for purchase of new equipment or certain components of newly constructed buildings.
- Code Sec. 179 Expensing
The new law extends the increased 2008 Code Sec. 179 expensing (aka, small business expensing) amounts for 2009. The 2008 ESA increased the amount of Code Sec. 179 expensing for 2008 to $250,000 and increased the threshold for qualifying purchases for the deduction up to $800,000.
Be sure to speak to your accounting service provider about these tax breaks. They will be able to answer any questions you may have and to help you take full advantage of the new laws to minimize your taxes. More information about the Recovery Act may be found at www.pkftexas.com/taxnews.