Save tax this financial year | $20K Instant Asset Saving - Melwood

How small businesses can save tax this financial year. [ends 30 June 2018]

How small businesses can save tax this financial year. [ends 30 June 2018]

Did you know you could save tax by purchasing assets for your small business this year?

If you buy an asset and it costs less than $20,000, you can immediately deduct the business portion in your tax return.

 

Who is eligible?

The ATO states that you are eligible if:

  • you have a turnover of 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.

 

What kind of assets?

This could be almost any claimable business asset such as a vehicle, a fridge, a coffee machine or even a portable storage shed.

For example, Andrew bought a small excavator for $18,000 which is used by his landscaping business. As the depreciating asset cost less than $20,000, Andrew is able to claim an immediate tax deduction for his asset. 

 

What about assets that cost $20,000 or more?

Assets that cost $20,000 or more (which can’t be immediately deducted) continue to be deducted over time using a small business pool. 

 

When does the incentive end?

The ATO incentive is due to end on 30 June 2018.

From 1 July 2018, the $20k threshold will reduce to $1000.

 

More information

For more information on this incentive, speak to your accountant or visit the ATO website



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