Are you a business owner looking for ways to reduce your tax bill?
Did you know the instant asset write-off threshold has increased to $150,000 and has been extended by the Federal government to include a further 3.5 million businesses?
The instant asset write-off incentive was previously available to SME’s as an immediate tax deduction for business purchases up to $30,000.
As part of an economic stimulus package, the threshold for the instant asset write-off will be increased from $30,000 to $150,000, and the eligibility cut-off for businesses expanded from turnover of $50m to $500m.
You can use the instant asset write-off to claim an immediate deduction when you purchase new or second-hand assets for your business, such as:
- tools and equipment
- computers, laptops and tablets
- office furniture
- motor vehicles
In other words, any asset involved in running a business is covered by the scheme.
You can claim an immediate deduction for multiple assets, so long as each asset costs less than $150,000.
For example, you can claim a deduction to purchase a new vehicle costing $50,000 and new office equipment costing $110,000 as both assets cost less than the $150,000 threshold.
The usual rules for claiming deductions still apply.
You can only claim the business portion of the expense, and make sure you have records to prove you paid for it.
There are a small number of assets excluded as part of the scheme, which are detailed on the ATO’s website.
If you need help, registered tax professionals, like UBT Accountants, can help you with your tax.