Happy Days! Instant Asset Write-off extended to December 2020

As part of the COVID-19 Business Stimulus Package, the Federal Government increased the Instant Asset Write-off from $1000 per item to $150,000 per item. They also expanded the criteria to claim this deduction to include businesses with an aggregated turnover of up to $500 million.

With the economy still struggling, the new increases have now been extended to the end of this calendar year.

That means any eligible, depreciating asset purchased for your business must be first used or installed ready for use by 31 December 2020.

Eligible assets may be new or used and you can purchase multiple assets as long as the cost of each individual asset is no more than $150,000.

Some businesses have been unaffected by the pandemic while others have found ways to expand. If your business has been doing well, the changes to the Instant Asset Write-off could be a highly tax effective way to grow your business. But make sure you talk to us before you make any plans. We want to ensure your purchases fit the government’s eligibility criteria.

For straight-forward taxation, accounting and financial advice, you can rely on, call the team at SVA and WPA on 02 8850 0388.

Claiming work-related expenses this year?

COVID-19, the bushfires and other natural disasters that occurred across Australia during the 2019-20 financial year, have the ATO reviewing their approach to work-related expenses.

In particular, they are expecting to see a decrease in work-related expenses such as:

  • Car use
  • Travel and
  • Clothing expenses

To claim these items at similar levels to last financial year, you will need to substantiate your claims.

If your usual pattern of work has changed in recent months (e.g. you are now working from home more than you once did), you may need to complete an additional record. But don’t worry. We’ll take you through what you need to do as part of our usual tax return preparation service.

For employees and individuals, download our 2020 Tax Return Checklist. You’ll find it on our Home page.

Claiming Car Expenses

There are several different methods to calculate work related car expenses. But if you use the “cents per kilometre” method, you’ll be pleased to hear the ATO has increased the rate to $0.72 per km for the 2020-21 financial year.

This method of calculating work-related car expenses:

  • Allows you to claim up to 5000 km per year, per car
  • Uses a fixed per km figure to cover all vehicle running expenses (which includes servicing, registration, insurance and petrol)
  • Relies on a log-book or diary entries as proof of km travelled

For straight-forward taxation, accounting and financial advice, you can rely on, call the team at SVA and WPA on 02 8850 0388.