Rebates -- phooey. Take some real stimulus.

By now everybody's heard about the "stimulus" rebates - $300 to $600 checks from the Treasury to you to jump start the economy.  But that's chump change.  The real money in stimulus is for businesses.  Two parts of the stimulus plan are directed at business.

1. Increased Section 179 deduction.  When you purchase a piece of business equipment, you normally have to capitalize the cost and recover it through depreciation over a period of years.  For most non-rental, non-real estate assets, Internal Revenue Code Section 179 allows you to elect to immediately deduct some of your fixed asset purchases.

For 2007, taxpayers could use Section 179 to expense up to $125,000 of assets that would otherwise be capitalized and depreciated.  The stimulus law doubles that amount for the first tax year beginning after December 31, 2007.  If your purchases of qualifying assets exceed $800,000, the deduction gets cut back.

2. Bonus Depreciation.  Not everyone can use Section 179.  Some passive investors don't get to take advantage of the deduction; some taxpayers just buy too many assets. For them, there is "50-percent bonus depreciation."  This applies to new assets that are normally depreciated over periods up to 20 years. 

Bonus depreciation is simple: you get to deduct half of the cost of the asset in the year it's placed in service.  You depreciate the rest under the usual rules.  If you have a $100,000 asset with a five-year life, you would normally get to deduct $20,000 of the cost in the year it goes into service.  Using bonus depreciation, the first year deduction is $60,000: half of the cost ($50,000) is the bonus, and the remaining $50,000 is depreciated under the usual rules.

Bottom line: if you have a business, the stimulus doesn't stop at $600.