$150,000 instant asset write-off for small business
If your business turnover is less than 500 million, you can instantly write-off any asset purchase up to $150,000. You must buy your assets before 1 July 2020 as the turnover limit drops to $10 million and the threshold to $1,000. You can claim a deduction for multiple assets as long as the cost of each asset is less than the relevant threshold.
If you’re in logistics and you need to update your fleet of trucks for example, now is the time.
What can I write-off?
- Immediately write-off the cost of each asset assuming each is in under $150,000.
- Claim a tax deduction for the business portion of the purchase cost in the year the asset is first used or installed ready for use.
- The assets can be new or second hand.
This will only help your business if;
- Your business needs new assets to grow and increase revenue.
- You had already planned to purchase these assets in the future.
- You have enough cash to buy the assets and keep running your business.
The instant asset write-off is a tax incentive, not free money. You still need to pay for the assets. It only makes sense if your business needs the goods. It is also important to note that any income made from the sale of an asset that has previously been claimed through the instant asset write-off needs to include the taxable purpose portion of the amount you received for the asset in your assessable income for that year. Even insurance payouts for the assets must be included.
Visit the instant asset write-off for eligible business section of the ATO website to find out if the tax incentive is right for your business.