If you are looking to buy an asset for your business and claim the $20,000 instant asset write-off, you are almost out of time. To be eligible to claim an immediate tax deduction, you need to buy the asset before 1 July 2017.
You may be eligible to claim a deduction for the business portion of each asset costing less than $20,000 if you have a turnover below $10 million and the asset was first used before 1 July 2017. Previously, the turnover limit was $2 million so you may be one of the businesses with a turnover between $2 million and $10 million and not even realise you are now eligible for this deduction.
It is important to remember that the $20,000 limit is the GST exclusive value if you are eligible to claim GST input tax credits. This means you could purchase something up to $22,000 including GST.
Assets that cost $20,000 or more can not be immediately deducted. Instead, they will be depreciated over time.
In the 2017 Budget, the government announced an extension of the $20,000 instant asset write-off to 30 June 2018 but this is yet to be passed in parliament so it is not guaranteed. If this is not passed, the limit will reduce to $1,000 on 1 July 2017.
If you are unsure whether you are eligible for this or how it impacts you and your business, please contact us.