Business owners! You have 2 weeks to claim the $20K Instant Asset Write-off
Key takeaways
- The $20,000 Instant Asset Write-off lets you claim a deduction for business assets, as long as an asset costs $20,000 or less.
- The write-off lets you deduct the full cost of an asset now rather than claiming the depreciation over time.
- What's next: You have until 30 June 2026 to use this write-off this financial year.
Small business owners have just two weeks left to take advantage of $20,000 Instant Asset Write-off.
If you're planning on purchasing some expensive business equipment or items, doing it this side of the financial year means you can claim a bigger deduction sooner.
Is my business eligible for the write-off?
Your business needs to have an aggregated annual turnover of less than $10 million a year to take advantage of the $20,000 Instant Asset Write-off.
You need to purchase the asset before 30 June 2026, and the asset must cost $20,000 or less.
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How does the write-off work?
Normally, businesses can claim depreciation on the cost of purchasing large business assets. You could purchase a piece of equipment that cost $15,000 and then claim a deduction each year according to the depreciation schedule.
That's typically 15% in the first year and 30% each year after that (depending on which calculation method you use — get an accountant if you're not sure).
With the instant asset write-off, you can claim the full deduction on any asset that costs $20,000 or less. This means it goes on your tax return for the current financial year and you can claim the full cost as a deduction now.
Claiming the full deduction now means taking advantage of it sooner. And money today is worth more to you than money later.
Example
What else do I need to know?
If the asset you're purchasing is used for work and personal use, you can only claim the amount you use for the business.
For example, you buy a $2,000 computer that you use for 50% for your business and 50% for personal use. In this scenario you'd claim a $1,000 deduction.
Assets over $20,000
If you purchase a business asset that costs over $20,000 you can't claim the instant write-off. Instead, you can use the simplified depreciation method, and add the cost to your small business pool.
This lets you claim a 15% deduction in the first year, and 30% in the subsequent years.
Sources
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