If your business has a turnover of less than $10 million, you are eligible for the Australian Taxation Office’s (ATO) $20k instant asset write off. This means you can write-off the business portion of any assets that were bought and installed for less than $20,000 each in your annual tax return. And in some good news, the ATO has recently announced the extension of this tax benefit into the 2018-19 tax year.
So is your business making the most of the $20k instant asset write off? Here are the facts you need to know:
- If you buy an asset and it costs less than $20,000, you can write off the business portion in your tax return for the relevant income year.
- You are eligible to use simplified depreciation rules and claim an immediate deduction for the business portion of each asset (new or second hand) costing less than $20,000 if:
- you had 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.
- 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 is less than $20,000 at the end of an income year (and before applying any other depreciation deduction).
- The $20,000 threshold applies from 12 May 2015 to 30 June 2019 and reduces to $1,000 on 1 July 2019.
If you’re unsure about any aspect of your tax obligations, or to be sure you’re making the most of tax benefits available to your business, consult your accountant.
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Source & for more info: www.ato.gov.au