Have you taken advantage of the instant asset write-off?

The Australian Taxation Office increased the instant asset threshold to $20,000 in 2015. Since then, the threshold has been extended multiple times. Following the Temporary Full Expensing period, which ended on 30 June 2023, it now allows small businesses with an aggregated turnover of less than $10 million to write off eligible assets costing less than $20,000.

New limits, increased benefit

Previously limited to $1,000, the increased threshold allows for many assets to be written off immediately, ranging from computers right up to vehicles and transport. The deduction comes from the business portion of an asset, and is required to be depreciated (so no property allowed). Other than the pricing threshold, this is a huge increase and a massive tax benefit for SMEs.

Some assets are still not available for write-offs, such as horticultural plants and other items that have their own unique rules associated with them.

The reason for the new legislation

Tax deductions of this nature are designed to help stimulate and remove strain on Australian SMEs, which will, in turn, help improve the total Australian economy. With such a large number of the residents of Australia either running or being employed by SMEs, it is little wonder that the Australian government is affording them such significant tax breaks.

It is important to keep records of these deductions to make claims for them, and with such a wide range of new items available for tax deduction, it may be a good idea to consider hiring a tax accountant to ensure all of your records are up to date and income tax ready.