SUBJECT – GENERAL DEPRECIATION
Hi I'm Kath Appleby, Business Advisor with over 20 years experience at MWL Financial Group specialising in medical practices
Did you buy an asset and wanted to claim for a deduction in your tax return?
Generally, you cannot deduct spending on capital assets immediately; instead you claim the cost over time, and we call this asset depreciation. A depreciating asset is one that has a limited effective life and can reasonably be expected to decline in value over the time it’s used.
A depreciation deduction only applies if you use the assets to earn assessable income. This type of deduction is available for small and large businesses, rental property investors as well as for employees who purchased assets at their own expense for work-related purposes. You may need to apportion the deductible percentage for an asset that has both business and private usage.
If you are a small business, you can access to the simplified depreciation rules – which include the instant asset write-off. Currently under this rule, you can instantaneously depreciate the asset full cost within the year you buy the asset, if they cost less than $20,000 (exclusive of GST).
For businesses other than small business, the general depreciation rules set out the amounts of capital allowances that can be claimed base on the asset’s effective life.
For more information contact us at firstname.lastname@example.org and either me, Kath Appleby or one of our experts will be more than happy to help.