With less than 2 weeks to go its time to decide if you need that extra piece of equipment and will it help you with your tax this year!
A timely reminder that you can claim the $20,000 immediate write-off of small business active assets if you meet the criteria. The small business definition for asset written off changed; turnover now $10 million as of budget night May 2017. To claim it this year you must do it by 30th June 2017.
Assets over $20,000 are not eligible for the instant tax write-off but can be fully written off over a longer period. Make sure it is the value of the asset is less than $20k. Some clients are assuming that a car trade-in reduces the amount to claim. This is not the case!
Any assets over $20,000 are depreciated at the same rate at 15% per cent in the first income year and 30% per year after that. If the value of the pool is below $20,000 until the end of June 2017, it can be immediately deducted too.
There are a few items not deductible, including some horticultural plants and any software developed in-house by a business. Software purchased for business use, for example, an account-keeping program can be claimed.
Its a immediate tax write off and remember that :
- Its must be less than $20k
- It is great for those expecting high tax bills
- Not so good if you want to spread your tax deductions
- Do try and rort the system as the ATO know all the schemes that people do to buy a an asset under 20K