Questions & Answers

The need to run smart and have smart financing has never been more important than it is today!

The American Recovery and Reinvestment Act of 2009 affords significant opportunities for purchasers of tractors, trucks and trailers to reduce their current year’s taxes and upgrade their current equipment.

Why should I buy a truck this year?

The tax stimulus legislation has tax benefits that are only available if you acquire your truck in 2009. The extension of the 50% Bonus Depreciation expires December 31, 2009.

What are these tax benefits?

Bonus Depreciation: Additional first-year depreciation of 50% of the asset’s purchase cost. For a tractor that means 66.67% of the assets cost can be expensed in the year of acquisition, or 2x the standard allowable depreciation (MACRS - 3 year asset with half year convention = 33.33%). Sec. 179 Expensing Allowance: In lieu of depreciating the asset’s cost, companies can expense up to $250,000 in equipment purchases as long as they don’t spend more than $800,000 in 2009 defined as tangible property (tractors, trucks and trailers) which is acquired by purchase for use in the active conduct of a trade or business.

How can these tax benefits help me?

The benefits can reduce a business’s tax bill by increasing their short-term tax deductions with the use of a Sec. 179 expense allowance and/or Bonus Depreciation benefit for eligible equipment acquired in 2009.

Generally speaking, the first year’s tax deductions for an asset acquired in 2009 will be substantially greater than those for an asset acquired in 2010 under terms of the American Recovery and Reinvestment Act of 2009.