** UPDATE - Extended until the 31st of December 2020 **
The Australian Government has increased the instant asset write-off threshold for a limited time. Keep reading to find out how this one-off change can help your business or you as an employee in 2020.
Until December 31 of this year, the Australian Government has increased the instant asset write-off threshold for eligible businesses. This means more businesses and employees than ever before can claim lump-sum tax deductions on individual, depreciable work-related assets of $150,000 per asset, per individual – a five-fold increase on the previous year’s $30,000 per-asset limit.
- Businesses with an aggregated turnover of under $500 million are eligible. This is a ten-fold increase from the $50 million eligibility limit in the previous financial year, meaning businesses and their employees that weren’t previously eligible now are.
- The threshold amount for each asset is now $150,000. This is a five-fold increase on the previous year’s threshold of $30,000.
- Under the instant asset write-off scheme, your eligibility depends on a range of factors:
- The date you purchased the asset and it was first used or installed ready for use.
- The cost of each asset being less than the threshold.
- Under this scheme, it’s possible for small businesses (like trades) to claim an instant asset write off on large items like a 4x4 vehicle used for work. However, since the threshold can be applied to each individual asset, the business can have accessories such as canopies and drawers instantly deducted from their taxable income come the end of the current financial year.