Posted by Anthony Toope
In June 2015, the Australian Senate passed legislation offering small businesses a $20,000 tax write-off on the purchase of items relating to their business.
It was one of the big-ticket items of that year’s budget, and was warmly welcomed by the small business sector. The former write off threshold was a meagre $1000.
The legislation allows small businesses and SMEs turning over less than $2 million annually to write-off essential office equipment and supplies to the value of $20,000 as a tax deduction.
The legislation is only active until 30 June 2017, giving small businesses a small window of opportunity to upgrade essential office equipment as a tax incentive.
Any small business or sole trader with an Australian Business Number is eligible for the tax deduction as long as their business has an annual turnover of less than $2 million.
Businesses can buy any machinery or equipment related to their business if each item is valued at less than $20,000. You can claim the full amount from your income to reduce your tax bill. There is no limit on the number of items a business can claim.
They sure are. Office equipment such as photocopiers, scanners and printers that cost less than $20,000 can be a tax deduction under this new legislation.
It means you can make your document management more efficient with the DocuMate 4799, improve office productivity with our SMARTSeries, or purchase just about anything from our wide range of multifunction devices as a tax incentive.
Items to be claimed must be physical items. Marketing costs are not permitted. You also aren’t able to claim stock or software for your business. There are also a small number of assets that aren't eligible for accelerated depreciation, for example horticultural plants that have specialised depreciation rules.
Just like any other business asset, you'll need to keep records to support any claims for a deduction. This includes the ongoing business use of an asset and its eventual disposal. The ATO has a risk-based program to identify taxpayers that are not meeting their obligations.