How does the bonus depreciation work, and how does it impact the business taxpayer?
The new law also provides business taxpayers with 50 percent bonus depreciation for qualifying property. Under first year bonus depreciation, a business can deduct half of the cost of a new asset and write off the remaining cost with the Section 179 deduction (if available) and/or regular depreciation deductions during the asset’s recoverable life. In essence, businesses can take advantage and utilize both the increased Section 179 deduction amounts and the bonus depreciation to reduce a significant amount of their taxable income. For property to qualify, it must be purchased and placed in service by Dec. 31, 2008, or by Dec. 31, 2009, for certain long-lived assets. Check with your tax adviser to see what property qualifies for the bonus depreciation and for more information on the new Economic Stimulus Act of 2008 and how it can benefit your business or you individually. LESLIE BALMFORTH, CPA, is a principal at Tauber & Balser, P.C. and serves as chief operating officer. She is respon
