If you are a business owner and you are considering purchasing new business equipment, now is the time to act! With the passing of the Economic Stimulus Act by Congress, business owners have been granted a tax break for purchasing new equipment in 2008.
Most of us have heard of the bonus tax refunds that have been approved through the passing of the Economic Stimulus Act. However, these are just a portion of the act. You may not know that there are components of the act that benefit business owners. One portion of this deals with the purchasing of new business equipment. Let’s face it, as a business owner of any kind, there is almost a continual need for new or improved equipment to help our business perform better. Unfortunately, many times we put off these purchases for financial reasons. Now you can purchase the new equipment and receive a tax break for doing it. The Economic Stimulus Act states that any business owner who purchases and puts into use new equipment in 2008, will receive a bonus 50% depreciation on that equipment on their 2008 taxes! This could mean significant tax savings for your business! The government has implemented this program to try to entice business owners into making their equipment purchases now in order to help stimulate the economy. The tax savings are available for any business equipment purchase that will be depreciated on your 2008 taxes. It is applicable to any type of business as well.
What types of equipment qualify? Any type that is used directly for your business, to benefit your business, and that will be depreciable on your 2008 taxes. If you are unsure if certain equipment will qualify, consult your tax professional for advice. Let’s look at a couple of examples of business types and the type of equipment that may apply. We’ll start small, with a home daycare provider. Child care providers need equipment unique to their business, such as play equipment, appliances, and computer equipment. As a child care provider, if you purchase equipment that will be in use long term, then you will probably depreciate that equipment on your taxes. So, if you purchase a new swing set, a new refrigerator, or a new computer, you can collect the additional 50% tax savings when you depreciate these items. While these are a large outlay of cash now, it is worth it to make the purchase now to receive the tax benefits. Looking at a computer consulting company, they may need to purchase a new server, new office furniture, or new laptops for the consultants. Again, these purchases will be depreciated on the 2008 taxes, so they will qualify for the additional tax credit. Finally, let’s look at a physician’s office. Physicians often need to purchase the latest technology to offer their patients the best care possible. Many times this equipment is very expensive. By purchasing this equipment in 2008, at least they will qualify for the additional 50% depreciation on the equipment.
Since this tax benefit is only available for equipment purchases made and put into use in the year 2008, now is the time to buy. It may be hard to part with that money up front, but if you know you are going to need the equipment eventually anyway, it is worth it to make the purchase this year and benefit from the tax savings.
Friday, April 18, 2008
Thursday, April 3, 2008
Economic Stimulus Act Gives Business Owners Some Much Needed Financial Relief
As a business owner, the Economic Stimulus Act that Congress has passed contains an important component that can affect your cash flow. This component of the Act states that business owners who purchase and put into use new equipment in 2008 will be able to claim an additional 50% in depreciation on that equipment on their 2008 taxes! That can mean a huge tax savings to you! Congress is hoping that this act will spur on business owners to purchase equipment now, which will help to stimulate the economy.
Let’s take a closer look at the Act itself. As stated above, you must purchase AND put into use the new equipment in the year 2008. That means that this act won’t apply to custom ordered equipment that you won’t receive and put into use until 2009. It also means that the sooner you purchase your equipment, the better! That way you are ensured of having your equipment delivered and operational in 2008. There is also no limit on the number of equipment purchases that you can apply to this credit in 2008. So you could make one equipment purchase or ten purchases! Of course, the equipment must qualify for depreciation in your business in order to qualify for the deduction. In general, more costly equipment that will be in use long term in your business will qualify for depreciation. This means that there is a great deal of latitude regarding which types of equipment will apply. If you aren’t sure what types of equipment would apply for your particular situation, speak to your accountant. The great thing is that this opportunity will apply for all types of business owners. That means that everyone from the home daycare provider to the brain surgeon can take advantage of this opportunity. Obviously, the more costly the equipment purchase, the larger the depreciation deduction will be.
What can this mean for the average business owner? Consider a business owner that is a Sole Proprietor, the home child care provider we mentioned above. A child care provider doesn’t need as much equipment as the brain surgeon, and certainly won’t spend the same amount on the equipment either! However, a child care provider could purchase a new piece of play equipment, such as a swing set, jungle gym, or trampoline, and could claim these items as depreciable expenses on their 2008 taxes. The provider would then be able to claim an additional 50% depreciation deduction on these items in the 2008 tax year! Other pieces of equipment that may qualify for the depreciation deduction for the home daycare provider are computers, computer accessories, and large appliances. Now let’s look at a small corporation, say a computer consulting company. This company could use this opportunity to purchase new servers, large software packages, or new computer equipment that would qualify for the depreciation deduction. Whether they purchase one computer or five servers, they can take the deduction on each item purchased. Finally, a large corporation, a construction company for example, could use this opportunity to purchase a new bulldozer, new communications equipment, and/or new computer equipment. This Economic Stimulus Act becomes especially beneficial to a business owner such as the brain surgeon we mentioned above. Physicians and medical providers often need to purchase costly medical equipment. The depreciation deduction they can receive by purchasing the equipment and putting it to use in 2008 could make the purchase that much more worthwhile.
With the passing of this new Economic Stimulus Act, business owners are finally receiving a much needed break when it comes to their finances. Since this deduction is only good for the 2008 year, it just doesn’t make good financial sense to wait until next year to make that equipment purchase. Do it now, while you can still receive the tax benefits!
Let’s take a closer look at the Act itself. As stated above, you must purchase AND put into use the new equipment in the year 2008. That means that this act won’t apply to custom ordered equipment that you won’t receive and put into use until 2009. It also means that the sooner you purchase your equipment, the better! That way you are ensured of having your equipment delivered and operational in 2008. There is also no limit on the number of equipment purchases that you can apply to this credit in 2008. So you could make one equipment purchase or ten purchases! Of course, the equipment must qualify for depreciation in your business in order to qualify for the deduction. In general, more costly equipment that will be in use long term in your business will qualify for depreciation. This means that there is a great deal of latitude regarding which types of equipment will apply. If you aren’t sure what types of equipment would apply for your particular situation, speak to your accountant. The great thing is that this opportunity will apply for all types of business owners. That means that everyone from the home daycare provider to the brain surgeon can take advantage of this opportunity. Obviously, the more costly the equipment purchase, the larger the depreciation deduction will be.
What can this mean for the average business owner? Consider a business owner that is a Sole Proprietor, the home child care provider we mentioned above. A child care provider doesn’t need as much equipment as the brain surgeon, and certainly won’t spend the same amount on the equipment either! However, a child care provider could purchase a new piece of play equipment, such as a swing set, jungle gym, or trampoline, and could claim these items as depreciable expenses on their 2008 taxes. The provider would then be able to claim an additional 50% depreciation deduction on these items in the 2008 tax year! Other pieces of equipment that may qualify for the depreciation deduction for the home daycare provider are computers, computer accessories, and large appliances. Now let’s look at a small corporation, say a computer consulting company. This company could use this opportunity to purchase new servers, large software packages, or new computer equipment that would qualify for the depreciation deduction. Whether they purchase one computer or five servers, they can take the deduction on each item purchased. Finally, a large corporation, a construction company for example, could use this opportunity to purchase a new bulldozer, new communications equipment, and/or new computer equipment. This Economic Stimulus Act becomes especially beneficial to a business owner such as the brain surgeon we mentioned above. Physicians and medical providers often need to purchase costly medical equipment. The depreciation deduction they can receive by purchasing the equipment and putting it to use in 2008 could make the purchase that much more worthwhile.
With the passing of this new Economic Stimulus Act, business owners are finally receiving a much needed break when it comes to their finances. Since this deduction is only good for the 2008 year, it just doesn’t make good financial sense to wait until next year to make that equipment purchase. Do it now, while you can still receive the tax benefits!
Thursday, March 27, 2008
Equipment Financing
One of our fantastic new services involves our partnership with Bank of the Ozarks in an equipment financing program. Because we have organized a bulk contract with the bank, we are able to offer our clients excellent rates on the purchase of new or used equipment that the bank will finance for 3 or five years. The process is incredibly simple. One of our reps will assist you in filling out a one page credit application that we will fax over to the bank. We usually receive credit approval within 24 hours. Once we receive credit approval, we will assist you in filling out the final paperwork, which we will send over to the bank. You will order the equipment for delivery to your office. Once the equipment is delivered and you have tested it to make sure everything is working properly, you will fill out a quick form to be faxed to the bank to let them know that they can release the funds to the vendor. Your first payment to the bank isn't due until 30 days after the funds are released. It is really that simple! And now is the perfect time to purchase new equipment! Why? Because the economic stimulus act that Congress has passed contains a clause that states that business owners who purchase equipment and put it into use in 2008 will qualify for an additional 50% depreciation on that equipment on their 2008 taxes! This is only good for the 2008 year, so you need to take advantage of this opportunity now! To apply for financing or to find out more information on this great opportunity, send me an email at eileen@ezrsolution.us Don't miss out on these savings!
Thursday, March 20, 2008
Welcome!
Welcome to EZR Business Solutions! We strive to provide the ultimate in customer service to our clients as we customize each of our services to meet our client's needs. One of the best features of our company is our close contact with other business owners. This allows us to offer resources to our clients that may not be available from other companies. For example, we work closely with a computer consulting company and a graphic design firm, so we can offer services to our clients in these areas as well. This blog is new for us, so bear with us as we begin to post information about our services over the next couple of weeks. Just to give you a taste of what is to come, we have just contracted with a financing institution to offer fantastic rates on equipment financing to our clients! And since the economic stimulus act is rewarding business owners who purchase equipment in 2008 with an extra 50% in depreciation on their 2008 taxes, now is the time to buy that new equipment! More information on this and our other services will be available soon! In the mean time, feel free to visit our website at www.ezrsolutions.us (it is in the process of being updated to include our new services as well) or send me an email at eileen@ezrsolutions.us and I will be happy to answer your questions or send you more information. EZR Business Solutions, making business finance easier!
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