2008 Economic Stimulus Bill  
     
    The following examples show how purchasing equipment in 2008 can have a much better tax savings than waiting until next year.  
    * Example #1 is based on a company not purchasing equipment and not taking advantage of the new Economic Stimulus Bill for 2008.  
    * Example #2 is what would happen to the same company if they purchased equipment outright in 2008.  
    * Example #3 is what would happen to the company if they purchased equipment and financed the purchase, instead of paying for the equipment outright.  
    TRY IT YOURSELF, Simply use the pull-down menu to select the Tax bracket and select an amount for equipment cost from the pull-down menu.  
    Enter Tax Bracket    
    Machine Purchase in $  
    HINT: For more info, place the mouse pointer on areas of interest and a popup window will appear with tips and info.  
      EXAMPLE 1 EXAMPLE 2 EXAMPLE 3  
      No Purchase Purchase Machine Finance Machine  
    Sales  
    Cost of Goods  
    Gross Profit  
    Less Expenses        
    Expenses  
    Income  
    Depreciation  
    Net Income  
           
    Pay to IRS (% Tax)  
    Net Income  
    Cash Flow for Year One  
    IRS Savings Year One $0  
    Cash Flow Outlay  
    Portion the IRS is paying of your machine purchase No Purchase  
      All of the cash flow outlay goes to the IRS. Company is not building assets Cash flow outlay is increased, however IRS is paying for a significant portion of the machine purchase. In this example the company is building assets. Cash flow outlay is substantially reduced the first year, the IRS is paying a significant portion of the machine purchase. In this example the company is building assets.  
       
    © Capital Machine 2008  
    Companies should always talks to their account to confirm eligibility for tax benefits.  
     
  Details on 2008 Tax Incentives   Back to Tax Tools