In May, the Federal Government renewed its commitment to allowing small businesses to receive an instant tax write-off for capital assets costing up to $20,000.
The following five facts might help you decide whether you want to take advantage of the asset write-off before 30 June.
- It’s a great opportunity for small business owners to purchase capital business items worth up to $20,000 and claim an immediate tax deduction. Cars, laptops, and even coffee machines count.
- The deduction threshold is per item. This means you can buy multiple items as long as each item is less than $20,000, net of (minus) GST.
- Be careful if you buy a number of items less than $20,000. When combined, they might make up one item worth more than $20,000. These purchases may, all together, not qualify for the immediate write-off.
- Buying a $20,000 item will not ensure you receive $20,000 back in tax. Most people can expect to receive 30c tax benefit for every $1 they spend.
- The asset can be new or second hand. You can pay for it in cash by or using credit to pay off later – as long as it is available for use in your business by 30 June, 2019.