FAQ’s

Each month, we will feature a new set of FAQ’s.  Previously posted FAQ’s will be available in our archives for your convenience.

August, 2008 FAQ’s

Q: If I purchase and use a hybrid vehicle for business purposes in my business, am I still eligible to use Section 179 accelerated expenses?

A. Yes, even though a hybrid car purchase can qualify for a credit, Section 179 expenses, bonus depreciation, and ordinary depreciation can still be used by the buyer.

Q: Are there nontax reasons for why I might want to buy a hybrid vehicle?

A: Absolutely. Hybrid vehicles have such good gas mileage, the fuel savings alone can be significant enough to affect cash flow for a small business. Even though Honda and Toyota are in their phase out sessions, these hybrids tend to carry their values well as of yet and can offer significant trade in value when the time comes.

Q: What is the Section 179 expense?

A: The deduction contained in the Internal Revenue Code Section 179 allows for expanded deduction of equipment purchased for the year of 2008. During the year 2008, the maximum allowable deduction is $250,000. Bonus depreciation has also been reintroduced. To qualify for bonus depreciation, the equipment must be purchased brand new and be used within a trade or business.