Right now is the very last time you can utilise the business asset write-off threshold of $20,000!! The ATO has extended the write off until 30 June 2018, however, as of July 1 – it is being reduced all the way down to only $1,000!
What is the $20,000 instant asset write off?
Basically, if you buy an asset and it costs less than $20,000, you can immediately deduct the business portion in your tax return.
Does any of this include GST? The cost of the item must be $20,000 or under (inclusive of GST) and even if you are registered for GST and claimed this GST back then your threshold doesn’t include GST.
The instant asset write-off allows businesses to claim up to $20k in a single transaction on business equipment and it can be claimed multiple times on separate items.
Is my business eligible for the $20,000 instant asset write off?
You are eligible to use simplified depreciation rules and claim the immediate deduction for the business portion of each new asset you purchase that costs less than $20,000 if:
• you have a turnover less than $10 million (increased from $2 million on 1 July 2016), and
• the asset was first used or installed ready for use in the income year you are claiming it in.
What if I buy something over $20,000?
It is important to note that assets that cost $20,000 or more can’t be immediately deducted. They will continue to be deducted over time using the general small business pool. You write-off the balance of this pool if the balance (before applying any other depreciation deduction) is less than $20,000 at the end of an income year.
As of July 1, the value of the asset reduction will decrease to a minuscule $1,000, so if you have been thinking about upgrading the equipment in your workshop, don’t delay… the instant write off is not going to be around for you to take advantage of next financial year!
There is literally no better time than right now to take advantage of this asset write off… to help you save even more money, why not take a look at our outstanding end of financial year equipment sale!
Get one over the ATO this year and put your hard-earned money back in your pocket while you can!
** NOTE: Always remember, to speak with your accountant, a registered tax agent, or qualified BAS agent to assist you with financial decisions for your business.