The jobs bill was signed into law today by President Obama.
Known as the "HIRE Act' (Hiring Incentives to Restore Employment Act), the new law does not include Bonus Depreciation.
This may be a non-event for many small businesses acquiring equipment this year if they would not have elected to take bonus depreciation anyway due to their reduced income during these difficult economic times.
Under 5-year MACRS, the annual depreciation deductions are 20%, 32%, 19.20%, 11.52%, 11.52%, and 5.76% in the first 6 years in that order. The biggest annual deduction in year 2 could match up nicely as a deduction against higher income next year for a company that installs solar this year.
The takeaway is this: It does not make sense for a company to put off installing solar to next year. Install now and get the big depreciation deduction next year when it has the most value...reducing higher income that would be subject to higher tax rates...especially after the Bush tax cuts expire this year and real rates rise along with the company's income!
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