The Economic Stimulus Package for the American People Act of 2008 signed in February by President Bush has a couple of minor benefits for emerging and medium-sized companies. The package doubles the limit for equipment and qualifying investments from $125,000 to $250,000. This is a benefit if you are expanding or you need to upgrade certain fixed assets in your business. If, for some reason, you exceed $800,000 in capital in the year, then this deduction is phased out for you. However, the package also allows for 50% bonus depreciation on qualifying investments, regardless of your total capital expenditures for the year.

If you are on track for a profitable year, then this can be a big help. Since many businesses are struggling in these recessionary times, the tax savings may not be as significant or lucrative as one might hope. Whatever your circumstance, it may be worth considering in your capital budget strategy. Since entity types, tax structures, and other items determine how this benefit will affect your business and you personally, we recommend you seek expert advice from a CFO Consultant to guide you through this strategy.