Claiming Accelerated Depreciation
Alan Law • August 13, 2020
Accelarated Depreciation
If you are running your business in this 2020 financial year, you may be able to claim an accelerated depreciation deduction or instant asset write-off up to $150,000 in your income tax return.
If the assets are eligible, there's no limit of number of assets for which you can claim.
From 12 March to 30 June 2020 (inclusive), the expansion of instant asset write-off threshold for each asset increased to $150,000 (from $30,000).
Eligible depreciating assets must be:
- First held by you on or after 12 March 2020
- Both new and second-hand assets can be claimed, provided each asset costs less than $150,000
- First used or installed ready for business use from 12 March 2020 until 30 June 2021 (you can only claim assets first used or installed up to 30 June 2020 in your 2020 tax return).
If you claimed the instant asset write-off for an asset, you can't claim accelerated depreciation.
To help you get your claim right:
Check if you're an eligible business
- Only claim a deduction for the business use portion of each eligible asset.
- You can only claim deductions up to the 'car limit' for certain vehicles.
- Keep all supporting documentation to show how you worked out your claim.
- A car limit applies to passenger vehicles. The limit is $57,581 for the 2019–20 income tax year
- If your asset is for business and private use, you can only claim the business portion
- You can claim a deduction for the balance of your small business pool if it's less than $150,000 at 30 June 2020 (before applying depreciation deductions)
- Different eligibility criteria and thresholds apply to assets first used, or installed ready for use, prior to 12 March 2020.
Remember, ACP Accountants, a registered tax agents can help you with your tax.
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