After weeks of negotiations, Congress passed, and the president signed into law, the $152 billion Economic Stimulus Act of 2008. The legislation’s centerpiece is a one-shot tax rebate for individuals, but there’s much more to the new law.
Here’s the skinny: A $600 rebate goes to single filers with an AGI up to $75,000; up to $150,000 for joint filers. Above these figures, the rebates will gradually phase out. Families with children may qualify for an extra rebate of $300 per qualifying child.
The IRS will send stimulus payments automatically starting in May; eligible taxpayers must file a 2007 tax return to receive the rebate. Payments will be direct deposited for taxpayers selecting that option on their 2007 returns.
Best of all: The new law doubles the Sec. 179 limit for small businesses from $125,000 to $250,000. (The inflation-indexed amount for 2008 was $128,000.) It also creates a 50% “bonus depreciation” deduction for new assets purchased this year. This double-barreled tax relief is expected to spur business spending in 2008.
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