Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

Capitalizing on new tax break

Posted by taxguru on April 10, 2008

It still amazes me that all of the media coverage of the recent tax law focuses on nothing but the tiny rebate checks and ignores the huge increase in the Section 179 deduction that could save small business owners a lot more money than the stupid rebates would provide. 

It was interesting to receive a mass email today from HP with the following subject:

See how the new economic stimulus bill might benefit you!

The top text:

The economic stimulus bill signed into law by President Bush on February 13, 2008 provides some exciting benefits for business!

One provision substantially increases the amount that small businesses can deduct for certain capital equipment expenditures from $128,000 to $250,000.

A second provision allows for bonus depreciation in 2008 on certain capital equipment expenditures purchased this year that would normally be depreciated over many years.

Of course, we recommend you speak with your tax advisor on how these provisions can benefit you directly.


This reminds me of a snail mail letter I received in 1984 from American Motors shortly after our rulers in DC had instituted the luxury car limits on vehicle depreciation.  The letter was addressed to tax professionals, advising us of how much more in tax savings via depreciation and the Investment Tax Credit our clients could have if they were to purchase a Jeep Grand Wagoneer because it weighed over 6,000 pounds, instead of a lighter vehicle. 

I have always thought this kind of angle is a smart marketing approach and have been surprised that more companies didn’t use it.


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