Here’s something interesting: did you know that out of the over two million actively trading businesses in Australia, about 96% are small businesses?
If you’re one of the many small business owners in the country, you might have heard of the ATO’s $20,000 instant asset write-off.
Bruce Edmunds and Associates is here to let you know what it’s all about and how you can take advantage of this asset write-off before June 30th.
How does the asset write-off work?
Set to end by the end of June 2019, the $20,000 tax write-off is specifically for small businesses.
A small business is qualified to claim the immediate deduction in its 2018 tax return if it has:
- A turnover of less than $10 million
- An asset (new or otherwise) costing less than $20,000 was installed or used in the tax year you are raising a claim in
Any new or existing assets the small business has over $20,000 are not eligible for the instant write-off, however these assets can be added to the small business pool.
If the balance of the small business pool is below $20,000 at the end of the year (before depreciation) then the whole amount can be claimed.
The $20,000 limit came into play in 2015, and it was set to reduce to $1000 on the 1st July 2018.
However, due to changes in the budget, it was announced last month that the $20k write-off has now been extended to 30th June 2019.
What assets are covered by the write-off?
When it comes to the instant write-off, it only covers depreciating assets worth less than $20,000.
When we say depreciating assets, we are referring to those whose value is expected to decline as time passes.
In the past, the depreciation of assets was spread out over the course of several years. However, with this instant write-off, it is done all in one go!
The following are examples of sorts of assets that can be considered under the write-off:
- Vehicles for business or work use
- IT hardware (printers, laptops, computers, etc.)
- Office furniture
- Tools and machinery used by tradesmen
- Fittings and furniture for shop and/or office
- Kitchen equipment
It’s important to note that not all assets are qualified. Assets such as the following are examples of those that are not included in the write off:
- Computer software
- Trading stock items
Are you a small business owner in need of help with your tax write-offs?
Contact Edmunds now before the 30th June deadline!
As the tax write off deadline looms and its future remains uncertain, small business owners should see to it that they are able to take advantage of this policy.
Given that taxation can be a little complicated, you as a small business owner can always rely on the expertise of the accountants of Bruce Edmunds and Associates.
As accounting experts in Melbourne since 1966, Edmunds is committed to helping you sort out all of our taxation requirements and concerns including making sure you are able to maximise this tax year’s write-off.
If you are keen to know how we can best assist you with your tax write-off and other accounting needs, give us a call today on (03) 9589 5488 or you can email us at firstname.lastname@example.org and we can give you a call.