Small businesses should utilise $30k instant asset write-off
Business expecting healthy profit this financial year should consider upgrading their business equipment. With the new $30K depreciation write-off threshold before 30 June 2020, it is arguably the best time to get new IT equipment or office furniture & fitting while maximising the tax benefit.
Who is eligible?
You can choose to use the simplified depreciation rules if you have a small business with an aggregated turnover (the total normal income of your business and that of any associated businesses) of less than:
- $10 million from 1 July 2016 onwards
- $2 million for previous income years.
What are the instant asset write-off thresholds?
If you purchased assets from 7.30pm (AEST) on 12 May 2015 and first used or installed them ready for use:
- From 7.30pm (AEST) on 12 May 2015 until 28 January 2019
you can immediately deduct the business portion of most depreciating assets costing less than $20,000 each - From 29 January 2019 until before 7.30pm (AEDT) 2 April 2019
you can immediately deduct the business portion of most depreciating assets costing less than $25,000 each - From .30pm (AEDT) 2 April 2019 until before 30 June 2010
you can immediately deduct the business portion of most depreciating assets costing less than $30,000 each
Assets value over the thresholds
For assets with value above the above threholds, small businesses can also:
- Pool the business portion of most higher cost assets (those with a cost equal to or more than the relevant instant asset write-off threshold) and claim:
- A 15% deduction in the year you start to use them or have them installed ready for use
- A 30% deduction each year after the first year
- Deduct the balance of the small business pool at the end of the income year if the balance at that time (before applying the depreciation deductions) is less than the instant asset write-off threshold.