That is right. The President said the two sweetest words a small business owner can hear....."Economic Stimulus"
Essentially, the Federal Government will give you money, either before or after the fact, to purchase capital equipment.
Look for the following
- Unrestricted Tax Credits: This is a dollar for dollar reduction of your tax liability. Much better than a deduction because the government pays for the purchase of your equipment. The money that you would have paid in taxes now goes into your shop to earn more money. You can even spend more than your tax liability and get a refund on the overage.
- Restricted Tax Credits: Like the former, this one is dollar for dollar but you cannot get a refund for going over your tax liability.
- Accelerated Depreciation: Think Section 179. Look for bonus percents from 20% to 50%. This may come in two forms. A general form for everyone and 'Enterprise Zone' bonuses for highly impacted areas like The Peoples Republic of California.
Now, because the government is in a rush to do this, it is certain there will be two additional aspects to this bill.
- There will be a ton of pork in it as Congress slips in all kinds of extras
- There will be unintended consequences, aka loopholes. This is where a good tax accountant comes in.
Good luck and watch the news for the passage and signing of your government relieve for small business package soon.