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 products could be tax deductible?
“I generally tell people to scan your workplace environment. Everything that you see will generally be deductible immediately,” says Dr Raftery.
Office furniture and technology such as:
Kitchen essentials such as:
Office product essentials such as:
And the list goes on!
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 three 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:
“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.