With the end of Financial Year almost here, you may wish to think about some business upgrades to maximize the $20,000 instant tax deduction the Government is offering. I know most businesses could benefit from taking advantage of that policy right now!
Instead of having the asset depreciate over a number of years, you are able to write off the depreciation immediately and that is surely going to assist small businesses to buy new equipment or technology to make them more efficient or help grow the business. Under the rules, a small business is one with a turnover of up to $10 million.
So, what can you buy to get the tax write off?
You need to buy a depreciating asset to the value of less than $20,000. A depreciating asset is one used in the course of business which has a limited life and expected to decline in value. Assets that qualify include:
• Office or shop furniture and their fittings
• Display screens, kitchen equipment, signage
• Air conditioners
• Work vehicles
• IT hardware including desktop computers, servers and printers (not software)
• Plant and equipment
• Art works for the office
Remember, it is possible to use this $20,000 option multiple times. However, the cost of each item must be under the threshold and these can include items bought second hand.
Previously the depreciation of the asset spanned several years where you got a bit of a deduction each year over several years.
As this stage, the policy is only available until 30 June 2019 but many businesses are hoping the Government would make it a permanent scheme. And it’s having the desired affect on small business by improving cash flow and providing a boost to small business activity and investment. With 2.1 million businesses in Australia, being the engine room of the economy, it’s much needed support from the Government.
What could your business benefit from with a $20,000 tax write off? Do we need to talk?