The Instant Asset Tax Write-Off is an initiative to help small businesses succeed. Many Australian businesses are not reaping the benefits of this Federal Government scheme, which could save your business thousands of dollars on reduced income tax. Here is what you need to know!
What is Instant Asset Tax Write-Off?
An Instant Asset Tax Write-Off allows businesses to deduct business expenses for tax purposes. The business can claim immediate deductions for asset purchases if the asset is used or installed in the income year for which your business is claiming. Thus, eligible businesses may write-off the cost of each asset that costs less than the threshold which is currently up to $150 000 per asset.
Who is eligible for Instant Asset Tax Write-Off?
Small to medium sized businesses with an aggregate turnover of less than $500 million are eligible for this initiative.
What can Instant Asset Tax Write-Off be used for?
New and second-hand assets are covered in this write-off, as well as multiple assets if the cost of each asset is under the threshold. Your business needs to apply simple depreciation rules, and eligibility is also dependent on the date of purchase of the assets and when they were first utilized. Examples of assets included in this scheme are work vehicles, machinery, tools, equipment, storage, furniture, and fittings.
This initiative is a stunning source of support for small businesses, illustrating that Federal Government is actively assisting local businesses and stimulating the economy.