$20k Small Business Deduction Passed

[ BREAKING NEWS: The Small Business tax break was passed today! ]
by Michael Garrone Published

With a little help from the Senate the $20,000 small business tax break was passed today.

If you are a ‘small business’ you can now safely go out and buy assets costing less than $20,000 before 30 June knowing your tax deduction is safe.

What else should you consider before going out and spending the cash before 30 June:

  • The tax break applies to assets such as plant and equipment, tools and vehicles that you would normally depreciate over a number of years.
  • You can buy as many assets as you want as long as they all cost less than $20,000 each.
  • To get the tax break before 30 June you need to incur the cost and have the asset ready to use before the end of financial year.  Taking delivery after 30 June will be too late to make it this financial year.
  • The tax break is only a deduction so your tax saving is only as much as your tax rate, eg, a $10,000 asset might only get you a tax saving of $3,000.
  • Make sure it’s an asset you really need, will it improve your business or help you grow?

[To qualify as a “small business” the turnover of your business and related businesses must be less than $2 million]

For those of you that do not qualify as a ‘small business’, let’s hope that the package does bring some stimulus to the economy as a whole through the sale of the goods and services to the small business sector.

If you have any questions about this measure and how it could impact you specifically, please don’t hesitate to contact one of our Tax Specialist team members. Or better yet, drop in and see us at our premises – Level 1, 27 James Street, Fortitude Valley.

John Knight - j.knight@businessdepot.com.au
Michael Garrone - m.garrone@businessdepot.com.au
Bradley Conn - b.conn@businessdepot.com.au
Joe Scuderi - j.scuderi@businessdepot.com.au
Craig Harrison - c.harrison@businessdepot.com.au
Josh Smith - j.smith@businessdepot.com.au
Michelle Burton - m.burton@businessdepot.com.au

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