In an attempt to boost the economy, Congress hammered out a new economic stimulus package in mid-February. The centerpiece of the new legislation is the highly publicized tax rebate program. However, other tax incentives targeted at the business sector were also included in the law.

Business incentives

Under the new legislation, a business may benefit from the following two tax provisions:

Enhanced Section 179 deductions : The new law increases the write-off allowed for assets placed in service in 2008 from $128,000 to $250,000. In addition, the dollar limit for the maximum Section 179 deduction jumps from $510,000 to $800,000. Amounts over this threshold are reduced on a dollar-for-dollar basis.

Bonus depreciation deductions: A business may be entitled to a 50% “bonus” depreciation deduction for new equipment placed in service in 2008. Any remainder that is left over after claiming the 50% deduction is still available for regular depreciation deductions.


Finally, the new law also raises loan limits for Fannie Mae, Freddie Mac, and the Federal Housing Authority (FHA).

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