Warning: constant() [function.constant]: Couldn't find constant TT_TH8US_LEN in /home/accountt/public_html/blog/wp-content/plugins/tweet-this/tweet-this.php on line 1821
Warning: constant() [function.constant]: Couldn't find constant TT_TH8US_LEN in /home/accountt/public_html/blog/wp-content/plugins/tweet-this/tweet-this.php on line 1821
Warning: constant() [function.constant]: Couldn't find constant TT_TH8US_LEN in /home/accountt/public_html/blog/wp-content/plugins/tweet-this/tweet-this.php on line 1821
Warning: constant() [function.constant]: Couldn't find constant TT_TH8US_LEN in /home/accountt/public_html/blog/wp-content/plugins/tweet-this/tweet-this.php on line 1821
Warning: constant() [function.constant]: Couldn't find constant TT_TH8US_LEN in /home/accountt/public_html/blog/wp-content/plugins/tweet-this/tweet-this.php on line 1821
The long awaited Small Business and General Business Tax Break legislation was passed by the Senate last month.
Small Business Investment Allowance
In summary, businesses with turnover less than $2 million will be able to claim a 50% tax deduction on any purchases of new equipment costing more than $1,000. This is up from the proposed 30% and has been extended out by 6 months. The Investment Allowance applies to most types of new plant and equipment, including motor vehicles and computer equipment. To be eligible, the equipment must be purchased between 13 December 2008 and 31 December 2009, and be installed and ready for use by 31 December 2010.
Medium to Large Business Investment Allowance
Businesses with turnover more than $2 million will be able to claim a 30% tax deduction on any purchases of new equipment costing more than $10,000 made between 13 December 2008 and 30 June 2009 and installed ready for use by 30 June 2010.
An additional 10% tax deduction is available when equipment is purchased either:
- between 13 December 2008 and 30 June 2009 and ready for use between 1 July and 31 December 2010; or
- between 1 July and 31 December 2009 and ready for use by 31 December 2010.
Eligibility for the Investment Allowance
Provided all of the eligibility criteria are satisfied, you can claim the Investment Allowance as a tax deduction in your income tax return for the income year in which you start to use an eligible asset or have it installed ready for use. The Investment Allowance provides a bonus tax deduction – it is not a rebate or a refundable tax offset. Note that this is not a rebate entitling you to a cheque refund.
Example:
A new truck costing $100,000 purchased by a small business:
50% tax deduction = $50,000
If your business tax rate is 30%, your tax bill will be reduced by $15,000 ($50,000 x 30%)
Equipment financed with commercial loans (chattel mortgage) or commercial hire purchase will be eligible for the allowance. For further information on the Investment Allowance, please contact us.
Related posts:
leave a reply