Are you thinking about buying assets to help your small business grow? Now is the time to buy! If you use the simplified depreciation rules you use the $20,000 write-off threshold.
Simplified depreciation rules can get a bit tricky, so here’s how to get it right and make sure you claim everything you’re entitled to.1. If you buy assets that cost less than $20,000 claim them in full as a deduction in your tax return at the end of the year.
- 2. For assets that cost $20,000 or more group them into what is called a small business pool.
- In your tax returns claim 15% of the pool in the first year then 30% of the pool each year after that, as a depreciation deduction.
- 3. If the balance of your small business pool falls under $20,000 (before you deduct the 15% or 30%) claim this amount in full as a deduction in your tax return at the end of the year.
If you would like to discuss this further we would love to hear from you.