End of Financial Year can be a good time to buy things you need for your business. In today’s Tax Tip, Peter explains why one of his tips is “Buy stuff!”
Buy Stuff
Buy things you need for your business. Take a good look around and see what you need. What’s broken, busted, burst or battered? If you need new things, it could be a good idea to get new stuff before 30th June.
This is because you can take advantage of the Instant Asset Write Off. It lets you claim 100% tax deduction for assets purchased up to $150,000. The asset needs to be installed and ready for use by 30th June to be eligible.
But the tax break goes back down to $1,000 from 1st July. After 30th June, assets which cost more than $1,000 will be depreciated over their useful life again. This means the tax deduction gets spread over several years and the benefit is not as great.
Yes, I know the COVID downturn has had an impact on many businesses. Profitability might have taken a hit. But you should still take a look at your figures to see where you stand. They might show a tidy profit, in which case it could be a good time to renew that busted piece of equipment.
Of course, it’s not wise to spend money if you don’t need the equipment, or if you need the cash to support your business in the months ahead. Which is why it’s best to talk your plans through with your accountant first.
Let me know if you need a hand.