The Economic Stimulus Act of 2008 Business Tax Benefits

January 10, 2009 by: The Tax Man

The The Economic Stimulus Act of 2008 included bonus depreciation to encourage businesses to increase investment. However, companies in a loss position cannot take advantage of bonus depreciation because they do not have any taxable income against which to take the deductions.

: Image by cbcastro via Flickr

The housing act allows taxpayers (corporations) to use accumulated alternative minimum tax (AMT) credits as well as research and development (R and D) tax credits to make investments that would qualify for bonus depreciation, if the taxpayers were profitable. The new law also dramatically changes the information reporting requirements of banks and other processors of merchant payment card transactions. Starting in 2011, they will be required to report a merchant’s annual gross payment card receipts to the IRS and the merchant. Congress believes that enhanced information reporting will help close the $300 billion tax gap, the difference between what taxpayers owe and what they actually pay