This Just In : Get in On the Act

The Economic Stimulus Act of 2008 signed into law by President Bush earlier this year has the potential to increase your day spa’s business deductions on your 2008 tax return. J. Tol Broome, Jr., president of commercial finance at BB&T Corp. and frequent contributor for DAYSPA magazine’s Money Matters column, cites changes in the maximum expense deduction law for business owners. These changes may prove to be of help to qualified small-business taxpayers.

The main points of the new deduction guidelines are:

• The maximum expense deduction (in lieu of depreciation) for capital purchases of personal property and depreciable computer software used in the conduct of business for 2008 has been increased from $125,000 to $250,000.
• The full amount of the increased maximum expense deduction is available to taxpayers who invest up to $800,000 in such eligible property in 2008.
• The increased deduction is reduced on a "dollar-for-dollar" basis to the extent that capital purchases of eligible property made in 2008 exceed $800,000. The reduction completely phases out when total purchases equal or exceed $1,050,000.

Consult with a tax professional to learn how any of these factors might benefit your business.

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