$20,000 Tax Cut for Small Business - Am I Eligible?

TopCat on 13/05/2017 - 22:51
Last edited 14/05/2017 - 08:24

My partner is looking to start a tutoring business, and I saw that in the new Federal Budget that the "instant depreciation" of up to $20,000 for small businesses will remain.
Does anyone have experience with this? It sounds good from the outset as it would allow the purchase of textbooks, a computer, and maybe some furniture if we ever wanted to do it from a home study?
Looking for some tips on what criteria the business would need to meet in order to be eligible?
Thanks.

Edit: we hope that we could earn up to $35,000 (havent looked into the applicable tax would be for that figure, but its a pro-forma assumption)

Financial

Comments

  • retiredfeline on 13/05/2017 - 23:02
    +3

    Have you looked at the ATO pages? E.g.

    https://www.ato.gov.au/Newsroom/smallbusiness/Lodging-and-paying/Instant-asset-threshold-increase-to-$20,000/

    As explained it's not a tax cut but instant depreciation.

  • chumlee on 14/05/2017 - 06:24

    You gotta make revenue first to then worry about a tax offset so that's where my focus would be

    • TopCat on 14/05/2017 - 08:26

      Of course. I edited the OP to give a bit of a guideline. I probably cant get to the $20,000 in taxes point but maybe up to $3k-$4k?

  • MITM on 14/05/2017 - 08:44
    +1

    $20,000 comes off your total income.
    It's not a grant like the baby bonus or 1st home owners.
    It's a deduction in the year of purchase and assumes the item/s are worth $0 in 12 months time. (i.e. unclaimable)

    In the past items <$1,000 were claimable in the year of purchase.
    In the past items >$1,000 were spread over 5 years (20% per year generally)

    In answer to your question - yes, you would be eligible because your tutoring business earnings would be from multiple sources.

  • whooah1979 on 14/05/2017 - 09:53

    "instant depreciation" of up to $20,000 for small businesses will remain.

    that is per asset, and not the total over the year.

    maybe some furniture if we ever wanted to do it from a home study?

    a 75" lcd would be nice on the study wall.

  • bemybubble on 17/05/2017 - 13:54

    IMO $20k ride off is useless unles it's your last trading year. Such a sugar hit…

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