How the Economic Stimulus Package is Good for Small Businesses
2/12/2008 4:00 PM
In an article
this morning in the New Yorks Times, Mickey Meece writes that the
economic stimus legislation passed by Congress last week could have the
most positive effect on small businesses. Because most of the custom
installation industry consists of small businesses, I decided the
article was worth a closer read.
Meece writes that in addition to providing rebates to taxpayers, the
$168 million measure also gives companies a 50-percent bonus deduction
on new equipment that would normally depreciate over many years. And it
increases to $250,000 from $128,000 in 2008 the limit
on expenses that small businesses can deduct from annual
income, with a total cap of $800,000.
I didn't totally understand the implications for a custom installation
business, so I asked one of our industry's leading financial
consultants to explain it to me. Darrell McComber, who will speak at
this month's CEDIA Management Conference, explained that, for years,
Congress has provided this type of stimulant for businesses that need
to invest in capital expenditures for personal property such as
vehicles, display rooms, computer systems, furniture, etc. But this
time, it's a little different.
"What's new with this new substantial increase," McComber explained,
"is that it encourages small businesses to act on their plans to
improve their business right away, knowing that the accelerated tax
deduction for depreciation will offset a substantial amount of
the initial cost immediately in the year these assets are purchased. In
some cases, the amount deductible can be 100 percent of the cost in the
year of purchase. Depending on your tax situation, this can be a
great incentive to go forward."
So there you have it. Unfortunately McComber is not taking on new
clients, but he has been known to answer questions from a certain
influential trade magazine editor, if you care to send