This deduction is available to small businesses. That is, an entity that is carrying on a business with an annual turnover of less than $10 million. In the past, the threshold was limited to businesses with an annual turnover of only $2 million, but you may not be aware that the threshold was increased to $10 million on 1 July 2016.
What it means is that if you are a small business and you purchase a new or second hand asset for less than $20,000 excluding GST, you can claim an immediate deduction for that expenditure. This replaces the need to depreciate the asset over its effective life; which can be quite a substantial period of time depending on the asset.
Assets that cost $20,000 or more cannot immediately be deducted, and should continue to be deducted over time using the general small business pool.
With only one month to go, bear in mind that the $20,000 immediate write off deduction will not be available after the end of this financial year. So, with 30 June 2018 fast approaching, if there is an asset that you need in your business that will cost less than $20,000 excluding GST, now might be a great time to make that purchase and claim your immediate deduction. Of course, getting a deduction shouldn’t be the driving reason behind purchasing a new asset, but if it is something that you need and it makes good commercial sense, then why not buy it before 30 June.
For more information about the $20,000 instant asset write off visit the ATO.
Or you can email your questions to firstname.lastname@example.org
By Emma Brooke, Financial Adviser, GTC Financial and Carissa Gunston, Client Manager, GTC Financial
Emma Brooke is an Authorised Representative and GTC Financial Services Pty Ltd ABN 94 010 624 914 is a Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL and Australian Credit Licence No. 236523
This information is general information only. You should consider the appropriateness of this information with regards to your objectives, financial situation and needs.
Source of original article: http://www.gtcfinancial.com.au/blog/last-chance-to-use-the-20000-immediate-write-off-deduction
The views of the author and those who provided the responses to the comments posted on the Knowledge Centre are not necessarily the views of the Sunsuper Board. While Sunsuper attempts to make a wide range of information available via the Knowledge Centre it may not cover all the options available to you. We’ve put this information together as general information only and as such it doesn’t take into account your personal financial objectives, situation or needs. You should get professional advice before relying on this information.