12 products that could be tax deductible this EOFY

12 products that could be tax deductible this EOFY

With EOFY fast approaching and the Temporary Full Expensing scheme now in motion, we reached out to Dr Adrian Raftery, principal of Mr Taxman and author of ‘101 Ways to Save Money on Your Tax – Legally!’ to share his insights on products that could be tax deductible for businesses this EOFY.

What assets are not tax deductible?

“What I always recommend is that if you are going to spend money, make sure to spend it on something that is tax deductible. There is nothing worse than spending significant dollars and getting nothing in return. Your registered tax agent will generally be able to confirm if a purchase is tax deductible or not, but a good rule of thumb is that it must be incurred and be primarily used for business,” says Dr Raftery.

“Over the next two years, businesses with a turnover under $5 billion can immediately deduct the business portion of the cost of eligible new depreciating assets regardless of its cost under the Temporary Full Expensing concession. For second-hand assets, turnover must be below $50 million to qualify,” explains Dr Raftery.

There are a few exceptions to the immediate write-off deduction under the Temporary Full Expensing method for eligible businesses. These include:

  • Assets not located in Australia
  • Any non-business portion of the asset
  • Non-depreciating assets such as land
  • Buildings including any capital improvements (although these are usually deductible over 40 years via a separate Division 43 allowance)
  • Trading stock on hand at year end (but this is claimable in future years when goods are subsequently sold)

“A further restriction for this immediate deduction is placed on the purchase of motor vehicles as the claim is capped to the business portion of the car depreciation limit of $59,136.

“For large businesses with turnover greater than $5 billion, there will be a need to depreciate assets over a number of years dependent on their respective effective life as determined by the ATO,” says Dr Raftery.

Take advantage of the Temporary Full Expensing concession this tax time by shopping our EOFY sale or shop from our extended range of office products, technology and furniture.

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