Christmas might be just a few weeks away but when it comes to your business, the truth is there is no reason to worry about naughty and nice lists this year. Thanks to this year’s Federal Budget and the continuation of the $20,000 instant asset write off, you can treat your business to a Christmas gift regardless of its performance.

So, how does it work?

If you buy an asset and it costs less than $20,000, you can write off the business portion in your tax return for the relevant income year.

You are eligible to use simplified depreciation rules and claim an immediate deduction for the business portion of each asset (new or second hand) costing less than $20,000 if:

  • You had a turnover of less than $10 million (increased from $2 million on 1 July 2016); and
  • The asset was first used or installed ready for use in the income year you are claiming it in.

Assets that cost $20,000 or more can’t be immediately deducted. They will continue to be deducted over time using the general small business pool. You write off the balance of this pool if the balance (before applying any other depreciation deduction) is less than $20,000 at the end of an income year.

The $20,000 threshold applies from 12 May 2015 to 30 June 2019 and reduces to $1,000 on 1 July 2019.

Have a question or need some tax help? Contact our team on (07) 4632 1966 or get in touch via our online contact form.