Depreciation is an item that most small business owners worry about, and an item that has experienced many changes recently. Although the premise of depreciation remains the same; the idea that certain items purchased have a life that benefits the business beyond one year, The Small Business and Work Opportunity Tax Act of 2007 (or SBWOTA) and the Economic Stimulus Act of 2008 brought many changes. Including increases to the allowable deduction of both sec. 179 depreciation expense and sec. 168(k) or “bonus depreciation” as it is more commonly known.
For 2008 section 179 depreciation expense increases to $250,000 for qualified property with a phaseout threshold to $800,000.
For 2009 section 179 depreciation expense decreases to $133,000 for qualified property with a phaseout threshold to $530,000.
For 2008 Section 168(k) “Bonus Depreciation” expense increases to 50% of qualified property for first year purchases, aka purchases made in 2008.
As of this date, there is no “Bonus Depreciation” expense allowable for the calendar year 2009.