Update: 2 July 2018
In the latest Federal Budget, there was a proposal to extend the $20,000 instant asset write-off threshold to 30 June 2019. This change is not law yet.
A popular tax $20,000 write-off scheme for small businesses is extended and now applies until 30 June 2018. This is the last chance to benefit from the scheme as the $20,000 threshold applied from 12 May 2015 will reduce to $1,000 from 1 July 2018.
This instant deduction can be used for each asset that costs less than $20,000. So, if you own a small business and need more space to improve your business, building a backyard cabin could be justified just like other six most surprising items businesses claimed under the scheme. As long as you can justify the usage of the item is work-related, even the latest Xbox, Playstation and Nintendo games consoles, children’s pillows, doona covers and pyjamas, decorative wall hangings, bedding and night lights can be legitimately claimed.
So, if you have a small business with a turnover of less than $10 million and if you can prove your asset is:
- work-related and
- costs less than $20,000 and
- purchased, installed and ready for use by June 30, 2018.
you are eligible to use simplified depreciation rules and claim the immediate deduction.
The extension of the asset write-off is very significant – said KPMG tax partner Simon Thorp. This will provide a much needed shot in the arm for many small businesses across the country and will stimulate the economy and increase the investment and productivity of small business, he said. (source: The Sydney Morning Herald)
Extending the immediate deductibility threshold for small business: https://www.ato.gov.au/General/New-legislation/In-detail/Direct-taxes/Income-tax-for-businesses/Extending-the-immediate-deductibility-threshold-for-small-business/
$20,000 instant asset write-off: https://www.ato.gov.au/newsroom/smallbusiness/lodging-and-paying/$20,000-instant-asset-write-off/
Information in this article is a general in nature and does not take into account your personal situation, is not a substitute for professional advice. You must not rely on the information in this article as an alternative to legal advice from your accountant, registered tax agent or other professional legal services provider. Please consult with a professional tax agent before the purchase.