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| Tax Tips: New Tax Breaks For Businesses |
Nila Rakhit, CPA
03/30/2009
New law has tax breaks for businesses
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The "American Recovery and Reinvestment Act," signed by President Obama on February 17, 2009, contains a number of provisions that will affect businesses. Here's a brief overview.
* BONUS DEPRECIATION. First-year 50% bonus depreciation for new business equipment purchases is extended through 2009. Bonus depreciation is extended through 2010 for property with a 10-year or longer recovery period, for certain transportation property, and for certain aircraft.
* INCREASED EXPENSING. Code Section 179 first-year expensing of new and used business equipment purchases is extended through 2009 at the higher limit of $250,000. The deduction is reduced once purchases for the year exceed $800,000.
* LOSS CARRYBACK PERIOD. The new law allows businesses with average gross receipts of $15 million or less to carry back net operating losses for up to five years, rather than the normal two years. This extension applies only to losses incurred in 2008.
* WORK OPPORTUNITY CREDIT. Two new categories of targeted groups are eligible for the work opportunity tax credit if hired in 2009 or 2010: unemployed veterans and disconnected youth.
The new law is a massive 1,000 page document, so this quick review by no means covers all the provisions that may affect your business. For guidance in your business tax planning under this latest law, contact our office at (617)678-4021.
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