Do you own a small business with a turnover of less than $50 million? You could be entitled to tax deductions for new and second hand assets. Here, we take a look at the nitty gritty details.
Claim assets worth up to $30,000
You can claim multiple assets worth up to $30,000 each. This cap varies, depending on when you bought the asset, as follows:
- $30,000, for assets bought between 7.30pm on 2 April 2019 and 30 June 2020
- $25,000, for assets bought between 29 January 2019 and 7:30pm on 2 April 2019
- $20,000, for assets bought before 29 January 2019.
To be eligible, an asset must be bought and first used or installed, ready for use, within the designated time frame.
Calculating the value of an asset
For an asset to qualify, its entire value must be less than the threshold. For example, a $29,000 vehicle purchased between 7:30pm on 2 April 2019 and 30 June 2020 would be eligible, but a $31,000 vehicle would not.
In addition, to work out how much you can claim, you must subtract the value of private use. For example, if you bought a computer for $10,000 and used it privately 20 percent of the time, then you would subtract 20 percent of its value – or $2,000 – and claim $8,000.
Make your purchases before EOFY
Whether you’ve been thinking about buying a second hand car or investing in some sorely needed equipment, getting in before the end of the financial year is a good idea. Make your purchase before 30 June and your business could benefit from a significant tax deduction.