Buy now and save!
Mark Spaulding, Editor in Chief -- Converting Magazine, 6/1/2008 2:00:00 AM
Have you gotten your income-tax rebate check yet? Or the automatic deposit of your rebate? The potential boost to the US economy from the $150 billion overall that Uncle Sam is handing out is supposed to show up any week now.
That's the plus for individuals and families, but what about your business? Want to take advantage of the corporate benefits of the Economic Stimulus Act? Now's the time to invest in capital equipment.
According to NPES, The Assn. for Suppliers of Printing, Publishing and Converting Technologies (www.npes.org), the economic stimulus package provides huge investment incentives for converting equipment sold and installed before 2009. But time's running out. The act gives a 50-percent bonus depreciation on new equipment purchased after Dec. 31, 2007, and installed before Jan. 1, 2009. It also nearly doubles the limit on capital investment this year that can be expensed, raising it to $250,000 for companies that purchase less than $800,000 of capital assets in 2008.
But remember, the “placed-in-service” date for qualifying equipment purchases is vital to the effectiveness of these tax incentives, warns NPES. Obviously, large capital-equipment systems need more leadtime for engineering and installation than is typical for smaller buys.
Here's one example of how the Act can work for you, according to NPES. Say you purchase a laser digital-converting (diecutting) system at $400,000 (without the tax cut). By adding up the new expensing provision of $250,000, plus the new 50% bonus first-year depreciation of $75,000, plus regular depreciation of $10,500 would equal $335,500 total first-year depreciation. Your tax savings would be $135,000 for a new effective price on that system of only $265,000. Of course, here comes the legalese: “Consult your tax advisor regarding specific circumstances and transactions.”
So, where to shop for all those new capital investments? By the time you read this, I'll have returned from drupa 2008 in Germany, which of course is this year's top destination for commercial printers as well as package printers seeking the latest technology. But certainly, keep in mind this fall's Graph Expo and Labelexpo Americas events. That's really cutting it close for the Jan. 1 installation deadline, but either way, the Economic Stimulus Act can help your business, and in a lot more ways than just that extra $600 in your pocket for personal income taxes.
As for our family, we've already spent our tax rebate on redecorating one room into a home office. We've done our part to help the economy. How about you?
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