As a result of the 2017-2018 Federal Budget announcements, the instant asset write-off of $20,000 for small businesses has been extended for a further 12 months.
The write-off was due to be reduced to $1,000 by 30 June, 2017. However, the government has decided to extend it, which gives businesses the opportunity to use the write-off for a further 12 month period until 30 June, 2018.
Here is what you need to know:
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To access the write-off your business must be trading, and must have an aggregated turnover of less than $10 million. The aggregated turnover is the annual turnover of all businesses associated with the entity, including any affiliates or entities connected with it.
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The asset must be used or installed and ready for use prior to 30 June, 2017.
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Second hand goods qualify.
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The immediate deduction can be used more than once, and is available to each item costing less than $20,000.
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Assets that are also used for private purposes will only qualify for the deduction to the extent of the business’s use.
- Your business cash flow.
- Your need for the asset to run your business.
- Whether you have a taxable profit or loss – if is likely that you will make a loss, then there would be no short-term benefit to the business, if you spend this money now.
You should consider the following before spending $20,000:
We can help you with all facets of tax planning. Call us now and we will show you how to save money on tax.