In this year’s Federal Budget announcement, small businesses have received further boosts in the extension of the instant asset write off which states that between now and 30 June 2020, small businesses can immediately write off any asset purchase costing less than $30,000 exclusive of GST
Also, worth noting is that ‘Small Business eligibility’ is now defined as ‘a business with an aggregated annual turnover of less than $50 million’, up from $10 million previously.
What exactly is the instant tax write off?
The Instant tax write off is not a cash hand-out but instead a deduction from your taxable profit that enables you to invest a portion of your profit back into your business. If you spend up to $30,000 on capital purchases, businesses with a turnover of less than: –
– < 10 million will receive a 27.5% deduction which equates to a $8,250 reduction in your payable income tax.
– < 50 million will receive a 30% deduction which equates to a $9,000 reduction in your payable income tax.
Why think about it now?
If you intend on taking advantage of the tax break in this financial year, then the asset must be installed and ready for use prior to 1 July 2019. If you purchase the asset before 30 June 2019 but the asset isn’t available for use until after that date, you can only claim the deduction against next year’s profit.
If you’d like any assistance or advice in this regard, or are thinking about replacing an existing asset in time for EOFY, please don’t hesitate to give us a call on 07 3721 4111 or fill out the form below and one of our team will be in touch at your preferred time.