Business Tax Tips: Take advantage of the $20,000 instant asset write off now!

In May 2015 the Federal Government increased the instant asset write off thresholds for small businesses from $1,000 to $20,000. This has been extended to the end of the 2017-2018 financial year, finishing on the 30th of June 2018.

The end of the financial year is almost here which means the next week may be the last opportunity to take advantage of this generous tax break. While there was a proposal in the latest federal budget to extend this incentive until 30 June 2019, this change is not legally approved yet.

With annual tax audits being completed at the end of each financial year, it’s important to get your accounting done properly and avoid any sticky situations with the tax man. This year, the ATO is randomly auditing taxpayers claiming work related deductions.

The Government has announced that from 1 July 2016, for individual taxpayers, the marginal tax rate of 37 per cent starts at $87,000 instead of the previous $80,000. 

How you work out your claims and what records you need to keep will depend on whether the motor vehicle you use is considered to be a car and whether you own or lease it.

If you perform some of your work from your home office, you may be able to claim a deduction for the costs you incur in running your home office, even if the room is not set aside solely for work-related purposes.

An ATO spokesman said the office was focusing on “unusually high work-related expense claims, including work travel across all industries and occupations”

The Federal Government hopes its revised welfare legislation introduced into Parliament is more palatable than the tougher cuts proposed in the 2014 budget.

Turning over the calendar to July 1 today brings in a raft of changes for small and medium businesses. The long-awaited company tax cut finally comes into effect but there’s also a range of other tax and legal changes you need to be aware of.