Applying the $20,000 instant asset write-off? Jessica Arabia, Finance Prospects

This tax time, your small business clients with a turnover of less than $10 million can write off assets costing less than $20,000 each in their 2016-17 return. All simplified depreciation rules will apply to assets when choosing this method.

We have identified some tax agents have under-claimed by not applying all the simplified depreciation rules. To use simplified depreciation rules correctly you must:

• write off eligible assets costing less than $20,000 each

• pool most other depreciating assets that cost $20,000 or more

• write off the small business pool balance if it is less than $20,000 at the end of an income year

• only claim a deduction for the portion of the asset used for business or other taxable uses

The $20,000 write-off threshold now applies until 30 June 2018.

Source: ato.gov.au