How the Stimulus Plan Can Benefit your Business

Resource Nation

March 5th, 2009 by Merrin Muxlow

According to recent data from the U.S. census, small businesses create 98% of new jobs.  Businesses with less than 100 employees generate more than 50% of the nation’s GDP.  So it’s with good reason that President Obama promised help for small businesses as part of the Economic Recovery and Reinvestment Act of 2009, the “stimulus plan” for short.  So what help does the plan give to small businesses?  How can you take advantage of changes to tax rules and lending restrictions?

The stimulus plan provides several different provisions that can save small companies money on taxes, increase access to loans, and provide grants for certain small businesses.  For applicable information about any of the tax provisions, consult your tax preparer.  Here are a few of the ways you can take advantage of the stimulus plan:

What the plan does: Extends last year’s expanded §179 deduction, allowing a business to deduct up to $250,000 in capital expenditures.
What this means: If you purchased business equipment last year (and haven’t filed your taxes yet) or plan to make a purchase this year, you can “write off” more of the cost.  If you’ve got the available budget, now is a good time to make big purchases like copiers or pos systems.

What the plan does: Extends last year’s increased 1st year depreciation deduction, allowing businesses with less than $15 million in receipts to deduct 50% of the value of property placed in service in 2008 or 2009.
What this means: If you haven’t filed a 2008 tax return and made some big purchases last year on machinery, equipment, or other business assets such as phone systems, you can claim a depreciation deduction of 50% of the cost.  If you’ve been holding off on purchasing new equipment, buying it this year can net some big savings in the form of lower taxes. Read more.