What are the new rules regarding depreciation?
The rebate for individual taxpayers was the most publicized piece of the Economic Stimulus Act of 2008, yet there are two major provisions that businesses need to focus on: bonus depreciation and increased Section 179 expensing. A substantial one-year increase in the maximum amount of qualified property that can be expensed (from $128,000 to $250,000 during 2008) is accompanied by increases to the phase-out threshold (from $510,000 to $800,000). That means if taxpayers add more than $1,050,000 in qualifying property, they have no Section 179 deduction. This deduction is limited to the taxable income of the trade or business, though the nondeductible amount can be carried forward indefinitely. The new bonus depreciation rules are back for a limited time. They allow a taxpayer 50 percent first-year bonus depreciation on qualified property that meets all three of these requirements: • Original use must begin with the taxpayer after Dec. 31, 2007 (no used property), • must be acquired afte
