In challenging economic times, foresight and diligence can really pay off. Now is not the time to be a spendthrift; we must all look for opportunities to save money. President Bush's Economic Stimulus Act of 2008 - while certainly not a panacea for the economic downturn we're facing - does offer businesses a couple of valuable tools to help justify expenditures.
If you're not an accountant, the Stimulus Package can seem a little complicated. To help you wade through the ins and outs of it, we've enlisted the help of industry consultant Garry Bartecki of BDO Seidman in Chicago. His article on page 50 will help you decide if you can take advantage of the package provisions.
To summarize a little of it here, if you're considering an equipment purchase for your business, the stimulus package might make this the time to buy. There are two key provisions that benefit businesses that purchase equipment and put it into use in 2008: an increased expense deduction and a bonus depreciation provision.
Here are some suggestions on what to do next, compliments of Wells Fargo:
- Think about what equipment investment will position your business for economic growth and productivity.
- Evaluate the equipment currently being utilized by your organization and see if you could benefit from updating, supplementing or replacing equipment that gets used on a regular basis or from expanding the capabilities of your business.
- Add up your potential equipment purchases. The amount you spend and the types of equipment purchased will determine the extent to which you are eligible for one or both of the tax incentives.
- Is buying or leasing right for you? Talk to a banker, they can help you determine financing options and the 2008 Stimulus Package could have an impact on leasing rates you might want to consider.
- Before making a purchase, talk to your accountant or tax advisor to learn how these tax incentives can work for you.
As you will discover when you read more about the incentives, there is a lot to consider before making a decision on whether or not to take advantage of these opportunities. The first step is getting informed and the next is getting organized. Good luck on a prosperous rental season.