It can be difficult and time consuming to wrap your head around all of the tax information that is out there, but, in this case, it could be worth it. Many businesses are underutilising the $20,000 instant tax write off that was launched by the Federal Government in 2015, but a brief review could benefit you before the end of this financial year.
We should specify that instant in this case doesn’t mean that the ATO will send a carrier pigeon with a cheque in its mouth on the same day you decide to go on a spending spree, however it does mean that within the financial year you purchased and started using your assets, you’ll reduce your taxable income and tax payable, so reasonably instant as far as the ATO is concerned!
What can you claim?
This deduction applies to physical assets used for business purposes, so the usual suspects like vehicles, computer equipment and tools to name a few. There has been no limitation placed on the number of items that can be claimed within the financial year, each item just needs to be under the $20,000 price point, it can even be new or second hand. You can also still claim items that may be split between business and personal use, such as a computer, however, only the business portion can be deducted.
Just be careful about claiming depreciation, this write-off is basically making it possible to claim the depreciation of the life of the item, as a lump sum in advance, and the ATO will no doubt be looking out for violations of this more closely from next financial year.
So, it looks like now would be the perfect time to update your computers, there’s only a couple of months left to take advantage of this, or maybe you need to urgently get a hold of a 3D printer … or a drone … or … yep ok think we get the message.