Most small businesses now know about the $20,000 tax offset provided by the ATO that was introduced on 12th May 2015.
What many of you may not know is that this write off will be reduced to $1,000 from 1st July 2018*
There may still be the good news of the $20,000 instant asset write-off threshold being extended to 30 June 2019. This was proposed in the latest Federal Budget, however, this change is not law yet.
This offset means that if you buy an asset by 30 June and it costs less than $20,000, you can write off the business portion in your 2018 tax return.
According to the ATO 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 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.
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.”
If you’d like to take advantage of this $20,000 offset please contact us on 07 3883 8999 so a tax professional can review your options with you.
*sourced from https://www.ato.gov.au/Newsroom/smallbusiness/Lodging-and-paying/$20,000-instant-asset-write-off/