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Big Win for Small and Medium Businesses: Instant Asset Write-Off Increased to $30,000

Posted by Rodney Michail on May 26, 2019 11:54:00 AM

The instant asset write-off has been increased from $25,000 to $30,000 and extended to business earning up to $50M per year (up from $10M previously) which means that an additional 220,000 businesses will benefit from this new development.

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The total number of businesses that can get up to $30,000 write-off is now up to 3.4 million.

What does this mean to you?

If you’ve been foregoing the purchase of new vehicles or equipment for your business, now would be a great time to start buying.

The table below shows that any purchase from April 2, 2019 to June 30, 2019 of a depreciating asset costing less than $30,000 can be immediately written-off.

From 7.30pm (AEST) on 12 May 2015 until 28 January 2019

From 29 January 2019 until before 7.30pm (AEDT) 2 April 2019

From 7.30pm (AEDT) on 2 April 2019 until 30 June 2019

You can immediately deduct the business portion of most depreciating assets costing less than $20,000 each

You can immediately deduct the business portion of most depreciating assets costing less than $25,000 each

You can immediately deduct the business portion of most depreciating assets costing less than $30,000 each

If the cost of the new asset is $30,000 or more, you can add it to your pool of higher cost assets and claim 15% deduction on the first year you start to use it and 30% deduction on the following years.

Here are some examples:

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Did not exceed threshold

John owns a computer repair shop and decided to buy a car so his employees can perform at-home repair services. The car costs $20,000 so John can immediately write it off since the cost did not exceed the threshold.

Exceeded the threshold

Mike purchases a $50,000 ute for his construction business and figured he’ll be using the ute for business 50% of the time. In this case, Mike can add $25,000 to his small business pool, claim 15% new asset deduction, and 30% after the first year.

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Just to make it clear, the cost of the asset means the amount paid for it plus any additional costs incurred to make the asset ready for use. Example: Installation, Transportation, etc…

Depreciating asset means anything that decreases in value and has a limited useful life span like a vehicle or machinery. (exceptions).

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