Posted on January 9, 2019
The $20,000 threshold has been recently extended to 30 June 2019.
If you buy an asset and it costs less than $20,000, you can write off the business portion in your tax return for the relevant income year.
You are eligible to use simplified depreciation rules and claim an immediate deduction for the business portion of each asset (new or second hand) costing less than $20,000 if:
- you had a turnover 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.
Assets that cost $20,000 or more can’t be immediately deducted. They will continue to be deducted over time using the general small business pool. You write off the balance of this pool if the balance (before applying any other depreciation deduction) is less than $20,000 at the end of an income year.
The $20,000 threshold applies from 12 May 2015 to 30 June 2019 and reduces to $1,000 on 1 July 2019.
Remember, the team at HCG is here to help you with any questions.
$20,000 instant asset write-off increase to $25,000 and available to 30 June 2020
In addition to our article “$20,000 Threshold Extended to 30 June 2019” published on 9 January 2019, we are pleased to advise that
the government has just announced plans to raise the threshold for the instant asset write-off to $25,000 (currently $20,000) and extend it for another year.
The write-off will be available for small business with an annual turnover of less than $10 million and will be extended for another year, running until 30 June 2020.
It had been due to expire at the end of the current financial year.
The government will be seeking to legislate the change when Parliament resumes on 12 February.