Beginning May 2, millions of people will begin receiving rebate checks from the IRS as part of the economic stimulus package. Most retailers are eyeing these rebates as a way of boosting their sales, and many already have plans to offer special targeted sales to get shoppers to spend the cash at their stores. Small business owners should consider this a prime opportunity and be proactive about marketing their products and services to consumers looking to spend the extra cash.
Most individual taxpayers will see checks in the amount of $600. Married couples who qualify for the full amount can expect twice that with an additional $300 per child. The federal government is issuing more than 800,000 rebate checks electronically in the first wave this week.
Hit with a barrage of questions regarding this year’s tax rebates, the IRS recently launched a fairly helpful EconomicStimulusPaymentsInformationCenter on their site. If you’re looking for your rebate, you can check the status of it online at the IRS.gov under Refund Status.
Unbeknown to many, tax breaks for small businesses were also included as part of the stimulus package. For one, the government increased the depreciation ceiling on the amount of money a business can deduct for a single year. This is a one-time tax code change that will only apply for 2008. The ceiling almost doubled from $128,000 to $250,000. Many will benefit from this, but how many small businesses spend this much a year on their equipment? First thing is, as a small business, you have to be making money. If you're a young business and not yet making money, you don't get any benefit at all.
While it’s impossible to predict exactly what effects this year’s stimulus package will have on the economy, it’s up to you to take advantage of the new tax breaks as well as prepare accordingly for what could be an influx of customers coming through your doors. Focus on your sales, and the rest will follow.