When the Ecomomic Stimulus Act of 2008 was signed into law in February, the press focused its attention to the tax rebate checks that will be mailed out to individual taxpayers starting in May. And while those checks are expected to spur economic activity, a revision in the tax code for small and medium businesses (SMBs) will have an even more immediate impact on companies' ability to invest in infrastructure during 2008.

Specifically, the Act raises to $250,000 the expensing allowance for depreciable business assets, and increases the maximum investment phase-out to $800,000. The Act then increases the adjusted basis of certain depreciable property such as IT equipment in 2008 to 50% from the normal 30%.

For example, under the new legislation, if you acquire qualifying hardware valued at $650,000, you can expense the first $250,000, effectively reducing the tax basis of the acquisition to $400,000. Then, you can depreciate half the value, or $200,000 in 2008, reducing its remaining depreciation to $200,000 over the remaining depreciation schedule. It's like an interest-free loan from the federal government that's paid back over the life of the equipment!

These tax advantages are only available to tax-paying companies in the United States, on qualifying equipment placed in service between December 31, 2007 and January 1, 2009, so don't put off your important IT acquisitions too long, or you might miss out!