30 May Small Business Accelerated Depreciation Reforms

The recent federal budget has seen some really good deductions available to Small Businesses.

In an attempted to simplify the depreciation regime for small businesses which has seen a number of amendments in recent years.

What changes will be affecting taxpayers in 2015?

Assets purchased and installed between 01/01/2014 before 7:30pm (AEST) 12/05/2015 small businesses can

• immediately write-off most deprecating assets costing less than $1,000
• pool most other depreciating assets (irrespective of their effective life) in the general small business pool and depreciate at the diminishing value rate of 30%
• depreciate the newly acquired assets great then$1,000 at 15% in the first year regardless of when they asset was purchased.

Assets purchased and installed from 7:30pm (AEST) 12/05/2015 and 30/06/2017 small businesses can

• immediately write-off most deprecating assets costing less than $20,000
• pool most other depreciating assets (irrespective of their effective life) in the general small business pool and depreciate at the diminishing value rate of 30%
• depreciate the newly acquired assets great then$1,000 at 15% in the first year regardless of when they asset was purchased.

From the 1^st July 2017, the threshold is $1,000

Important Things to Note About Depreciation:

1. A small business means a ‘small business entity’ which is an individual, partnership, trust or company with aggregated turnover of less than $2 million.
2. You may choose to stop using the simplified depreciation rules or become ineligible to use them – for example if your turnover exceeds $2 million. You will then use the uniform capital allowance (UCA) rules to calculate the depreciation deduction

See https://www.ato.gov.au/Business/Small-business-entity-concessions/ for more information.