29th July 2020 | Business
Under the instant asset write-off, eligible businesses can claim an immediate deduction for the business portion of the cost of an asset in the year the asset is first used or installed ready for use. Instant asset write-off can be used for multiple assets as long as the cost of each asset is less than the relevant threshold new and second-hand assets. It cannot be used for assets that are excluded from the simplified depreciation rules. The instant asset write-off eligibility criteria and threshold have changed over time. You need to check your business’s eligibility and apply the correct threshold amount. This depends on when the asset was purchased, first used or installed ready for use.
Eligibility to use instant asset write-off on an asset depends on:
- your aggregated turnover(the total ordinary income of your business and that of any associated businesses)
- the date you purchased the asset
- when it was first used or installed ready for use
- the cost of the asset being less than the threshold.
If you run a small business and choose to use the simplified depreciation rules, you must use instant asset write-off on all eligible assets. Businesses with an aggregated turnover of $500 million or more are not eligible to use instant asset write-off. From 1 January 2021 the instant asset write-off will only be available for small businesses with an aggregated turnover of less than $10 million and the threshold will be $1,000.
Speak to our professionals at Ax3 partners info@Ax3.com.au
or for more information visit: https://www.ato.gov.au/Business/Depreciation-and-capital-expenses-and-allowances/Simpler-depreciation-for-small-business/Instant-asset-write-off/?fbclid=IwAR3M4ji0alTkKHcEVpSSJkFTc4WZNRxG7E6IaBnHVtVtjqDLSTP5tRW75t4