The $20,000 threshold has been recently extended to 30 June 2019.
If your business has turnover of under $2 million, you are able to immediately claim a tax deduction on eligible business capital assets costing less than $20,000 (excluding GST if you are registered for GST, or including GST if you are not registered).
If you’ve been considering taking advantage of the instant write off, but waiting to see how your bottom line looks, now could be the time to make your decision.
Cashflow is an important consideration, and just like any business decision the motivating factor should not be the tax benefit alone. Ask yourself if you really need the asset and do you have the funds available, if cashflow permits and you need the asset then you should consider making your purchase before 30 June 2019.
You can apply the $20,000 immediate write-off to multiple individual new or second-hand asset purchases, meaning that small businesses could add several items together and claim the maximum deduction. But remember this is the tax deduction, not the actual tax saving. The tax saving will depend on your effective tax rate.
Eligible assets: Basically all depreciable assets (including second-hand assets) used in a business are eligible, including; motor vehicles, plant & equipment, computer equipment, office or shop furniture, website, signage, tools, sheds etc. Just remember the asset needs to be genuinely used in your business.
Before you make any big purchase decisions it is best to have a chat with us first to review your tax position and ensure that you are eligible for the concessions. We can also assist with arranging finance should you require, if you’d like to discuss your options give us a call on (03) 5976 4082.
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