Businesses with an annual turnover less than $10 million (from 1 July 2016) can claim the $20,000 instant asset write-off.
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 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 for the instant asset write-off applies from 12 May 2015 to 30 June 2019 and reduces to $1,000 on 1 July 2019.
Learn more about the instant asset write-off including some practical examples here on the ATO website.
If you have any questions or are still not sure if you can claim the $20,000 instant asset write-oﬀ or how to claim the $20,000 instant asset write-oﬀ, make an appointment to see your accountant – you can now book online here – or call Walshs on 07-3221 5677.