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Make the $20,000 small business tax break count

Moe Aung Tips and Tricks

So the Federal Government has been rather generous and issued a $20,000 tax break for small businesses… Which means you can buy stuff!

Can I get it?

If you are registered business, i.e. you have an ABN, and it turned over less that $2 million you can claim.

How much can I claim?

Businesses can buy any machinery or equipment related to their business if each item is valued at less than $20,000. You can claim the full amount from your income to reduce your tax bill. There is no limit on the number of items a business can claim.

And for what?

Cars, vans, utes, trailers, motorbikes, lawnmowers, ovens, fridges, coffee machines, other machinery, kitchens, tables and chairs, carpets, printers, photocopiers, tools, welding equipment, saws, generators, pumps, solar panels, heating, hot water units, water tanks, airconditioning units, sound and security systems, computers  – any item used for running the business – will be 100 per cent tax deductible.

For everything?

Not quite… You cannot use the money to buy stock for your business. Horticultural plants and in-house software also do not qualify. In-house software is anything you purchase that is custom made for your business. Anything off-the-shelf is fine though, so for those of you interested in SolidWorks, well you’re in luck!

But what if it is over $20,000?

Yes, but the value of items over that amount qualify for less generous and more complicated tax breaks associated with depreciation. We’d advise checking with your accountant before making any big purchases.

For how long?

You’ll have effectively two years to take up the tax break. The small business tax deductions will start at 7.30pm May 12, 2015, and end on June 30, 2017.

While we’ve got your attention, we’ll shamelessly plug our EOFY sale. There’s deals suitable for small businesses so if you every thought SolidWorks might be of use, now is the time to give it some thought.