Business

How to claim up to $20,000 on tax

TAX TIME: Deduct more from this year's tax.
TAX TIME: Deduct more from this year's tax.

WANT a tax break?

If you buy an asset before the next financial year, you can immediately make a deduction in your 2017 tax return.

As the end of the financial year approaches, The Australian Tax Office has reminded business owners they can make the claim on assets worth less than $20,000.

The cuts only apply to businesses with a turnover of $10 million, which has been increased from a previous eligibility cut off of $2 million.

The asset must have been used for the first time during the 2016-2017 financial year.

Assets that cost $20,000 or more can't be immediately deducted, the ATO says.

They will continue to be deducted over time using a small business asset pool.

In the Budget 2017, the government announced an extension of the $20,000 instant asset write-off threshold to 30 June 2018. This extension still needs to be passed in parliament. Under the existing laws, the threshold reduces to $1,000 from July 1 2017.

Consult a professional for advice if you're unsure.

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