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Get Your Tax Breaks--While You Can!
By Bizbox
The New York Times has a helpful article today on a few tax breaks that small business owners are in a special advantage to exploit--provided they act on them soon, since most of them apply to this year alone.
Foremost among these special one-time-only rules is a deduction of up to $250,000 on new equipment--that's twice 2007's ceiling--and 50% depreciation on equipment purchases after that.
The same law that provided the equipment deduction--which was also the law that told the government to send you that $600 check you got a few months ago--also established an extra-high first-year depreciation allowance on business vehicles, allowing you to write off over $10,000 on a car bought for your business.
Not entirely small business-related but still a great deal, and again applicable this year only, is the $7500 tax credit for certain first-time home buyers. And we hear housing prices are lower than ever! (A bit of gallows humor.)
Finally, the Times points out this may be the final year before the capital gains tax is raised from its current, historically low rate of 15%. Sen. Barack Obama has pledged to raise it if elected, and popular attitudes right now likely will go along with him, given the general lack of sympathy for people who derive their prime income from capital gains, who tend to be hedge fund managers and other professional investors. So small business owners may want to pay out dividends or even consider selling altogether under this advantageous tax circumstance.
The one thing we'd add, though, is that just as these various tax breaks were passed in response to what looked to be a sluggish year economy-wise, so next year--which could make the economy of the first half of this year look like a boom time--will likely see a push for more legislation along similar lines. And, oh look! The version of the bailout plan that the U.S. Senate will attempt to pass today includes extensions of several expired tax breaks. We predict that won't be the last such extension.
Comments (0)October 1, 2008 9:24 AM
