$5000 Small Business Write Off
One of the recent changes announced is the "$5000 Small Business Write Off" this change applies to all businesses currently eligible for using the simplified tax system (STS)
Currently Small Businesses can write off all assets under $1000 in the year of purchase instead of depreciating them over their useful life like most assets. Once the proposed change comes into effect in the 2012/2013 tax year, STS taxpayers will be able to write off all assets under $5000 in the year of purchase. This is a tax benefit, and is probably more important for Small Businesses as it simplifies their tax affairs by, hopefully, lowering the burden of meeting their tax requirements.
In the budget there was also a new tax break for cars announced and this write off is not like the last Small Business Tax Break! This new tax break allows eligible tax payers to claim $5000 of depreciation on their cars in the first year they are claimed, however this $5000 comes off the cost base of the asset (unlike the last tax break where the depreciation available was in addition to normal depreciation available). This change also takes effect in the 2012/2013 tax year.
Please make sure you fully understand these changes before you make any decisions based on them.
If you need any further assistance or clarification please do not hesitate to contact us, as any one of our accountants will be more than glad to answer any questions you might have regarding this matter or any other issues.
For more information please call the office on (03) 9580 2419 or contact our Small Business Accountants here