Communication Technology Services, Inc., Mobile, Alabama, Economic Stimulus Act of 2008 helps businesses invest in IP Communications

Communication Technology Services, Inc.

Providing Voice/High Speed Data Cabling & Business Telephone Systems

Economic Stimulus for the American People Act of 2008

The U.S. Federal Government encourages business investment by providing a unique way for small to medium size businesses (SMBs) to invest in technology improvements and solutions that are needed to succeed in today’s market.

The U.S. Economic Stimulus for the American People Act of 2008 (ESA) temporarily changed depreciation bonuses and expensing limits for 2008. Under the revised act, businesses can immediately deduct a substantial percentage of the cost of new equipment and software that is purchased and put in service this year. Communication Solutions qualify as eligible equipment for expensing and deductions!

SMBs that leverage the 2008 ESA to invest in Business Communication Technology will benefit even further by lowering the initial cost of investment, which could improve profits and cash position. The ESA provides the following tax breaks for businesses:

Special Depreciation Deduction – Provides immediate tax relief for Businesses that purchase new equipment and solutions in 2008. They can claim a 50-percent depreciation expense on their taxes in the first year.
Increased Expensing Limits – The 2008 ESA, expensing limits under Section 179 of the Internal Revenue Code have dramatically increased. Companies can expense up to $250,000 as long as total purchases do not exceed $800,000. This was increased from $125,000 in expenses on total purchases of $500,000 in previous years.
From the Internal Revenue Service: For example, if you purchase, place, and keep in service, property during the current calendar year that costs $350,000, you can deduct 50 percent of its cost, or $175,000, in 2008 as a special depreciation deduction. In addition, you can use the remaining $175,000 to figure your regular depreciation deduction.

To learn more about The Economic Stimulus for the American People Act of 2008, contact your tax consultant or visit the Small Business Administration online at www.sba.gov/stimulus.