I have a small professional services business that I run from home. I pay myself and my husband a wage and the maximum permissible superannuation contributions but it’s looking like I’ll have a fair surplus this year. I’m looking for suggestions of what to buy before the $20,000 instant asset depreciation amount reduces to $1000.
I’ve got a new laptop, printer and office fitout. I’ve been thinking of getting a Breville Oracle and a new i-phone but also looking for other suggestions. Are there any cars worth buying? I can’t find one at that price level that takes three baby seats.
What to buy? $20,000 instant asset depreciation for small business
LXE3 on 23/01/2018 - 15:03
Comments
Do you need to pay workers comp. insurance?
no need. op works from home.
Where a business is located is academic. Once your payroll exceeds $7.500 you are required to have workers comp. insurance. Equally, it does not matter if the employee is your spouse.
Just pay tax on the money. Your country will be better off for it
don't do that. 39% of our last bill went to welfare. it doesn't sound like op needs welfare.
a small professional services business
tax accountant?
Are there any cars worth buying? I can’t find one at that price level that takes three baby seats.
Second hand? As you've mentioned three baby seats - have you taken into consideration private use % for your car?
Have you considered other business structures? e.g. trust for discretionary distribution of income to family members/beneficiaries, private company and paying out dividends in later years, etc
Anyhow spending big for the sake of an instant tax deduction is kind of excessive seeing as the depreciation will carry on to later years - small business simplified depreciation, diminishing value, low value pool : 1st year 15%, 2nd year 30%, 30% etc
If you cannot find anything worthwhile to buy, it is actually okay to save the money and pay the tax. Assuming it's a company turning over less than $10m (27.5% tax rate).
- Spend $20k on something not that useful — $20k less in cash + some junk.
- Not spend $20k — $5,500 tax to pay to ATO, but $14,500 profit that can be paid out as franked dividend later.
Agreed. Tax deduction is a secondary consideration. Need comes first.
I can’t really distribute anymore income to either of us without hitting the top tax bracket, so I just thought I’d spend some of the money. I used to be an employee and have paid tax at the top bracket with very few deductions for years and years.
Security devices.
Mercedes S500? $~250K. 10% depreciation will reduce $25K of your surplus? And it can fit 3 baby seats.