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Accelerated Depreciation for Small Business Entities

Paul Money Partners > Blog > Accelerated Depreciation for Small Business Entities

The $20,000.00 instant asset write-off for businesses with aggregated annual turnover of less than $10 million has been extended for another 12 months – to 30 June 2019.

An SBE may also deduct the balance of its general small business pool at the end of an income year if the balance of the pool at the end of the year is less than a threshold amount – $20,000.00. For this purpose, the balance of the pool is determined prior to calculating any deductions in respect of the pool for the income year.

Assets costing $20,000 or more, and costs of $20,000 or more relating to depreciating assets can continue to be allocated to an SBE’s general small business pool and deducted at 15 per cent in the year they are allocated and 30 per cent in subsequent years.

 

Cost

The cost of an asset includes both the amount you paid for it and any additional amounts you spent on transporting and installing it ready for use.

If you are registered for the goods and services tax (GST) and can claim the full GST credit, you exclude the GST amount you paid on the asset when you calculate your depreciation amounts (and your instant asset write-off threshold is $20,000 exclusive of any GST).

If you are not registered for GST, you include the GST amount you paid on the asset in your depreciation calculations (and your instant asset write-off threshold is $20,000 inclusive of any GST).

If you are only able to claim a portion of the GST credit then the cost is reduced by the portion you can claim.

Author – Njameh Cham