Instant asset write off (IAWO) extension

Accelerated depreciation to 31 December 2020 for new and used assets

The government has extended the Instant Asset Write Off until 31 December 2020.  The threshold amount for each asset is $150,000. The asset could be a car used for business travel, computers, medical equipment, office equipment or furniture.

Some worked examples are;

1. Car Purchased and delivered before 31.12.2020 (New and Used) Cost $50k @ 60% business use

• GST Claim in the relevant BAS quarter

  If your log book is 60% business use you will be entitled to claim a GST credit of $50,000/11 x 60% = $2,727

• Depreciation claim in the 2021 FY tax return

  Your instant asset write off deduction for the year ended 30 June 2021 will be $50,000 less GST claimed of $2,727 x business use of 60% = tax deduction of $ 28,364

2. Car Purchased and delivered before 31.12.2020 (New and Used) Cost $120k @ 60% business use, subject to the depreciation cost limit of $59,136

• GST Claim in the relevant BAS quarter

  If your log book is 60% business use you will be entitled to claim a GST credit of $59,136/11 x 60% = $3,226

• Depreciation claim in the 2021 FY tax return

  Your instant asset write off deduction for the year ended 30 June 2021 will be $59,136 x business use of 60% = tax deduction of $ 35,482

3. Installation of new computers and network at the surgery cost $25,000

• GST claim in the relevant BAS quarter of $2,273

• Depreciation claim in the 2021 FY tax return.  Your accelerated depreciation for the year ended 30 June 2021 will be $22,727.