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Economic Stimulus Act of 2008
Recently President Bush signed the Economic Stimulus Act of 2008. Following is a brief recap of the major components.
Tax Refund
Many taxpayers will receive a rebate up to $600 ($1,200 for a joint return) with an additional $300
per-child credit. This amount phases out at a rate of 5% of adjusted gross income (AGI) above $75,000
($150,000 for joint returns). Rebate checks are expected to be sent in May at the earliest. For those
filing for an extension, the rebate will be delayed until after the return is filed.
Business Incentives
The Act also contains tax breaks for businesses tied to investment in new equipment during fiscal year
2008. The Section 179 expensing amount is increased to $250,000 (from $128,000) and the threshold for reducing
the deduction is also increased to $800,000 (from $510,000). In addition, businesses may take a one-time “bonus”
depreciation of 50% of the adjusted basis of qualifying property acquired in 2008. The limit for “luxury” auto
depreciation is increased to $8,000 if bonus depreciation is claimed for a qualifying vehicle.
Mortgage Provisions
The housing crisis continues to be an area Congress and the White House are trying to address. There is a temporary
housing loan limit increase for Fannie Mae and Freddie Mac and FHA approved mortgages. The new thresholds will vary
by state and at this time it’s unclear as to how it will affect the “jumbo” mortgage market, if at all.
For additional information, please feel free to contact a member of your service team or coheninfo@cohencpa.com.
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