Instant Asset Write-Off 2024: Key Benefits and How to Claim Them
How the Instant Asset Write-Off Can Boost Your Small Business
Is your small business taking full advantage of the instant asset write-off this financial year?
If you’re not sure, let’s ensure you’re not leaving money on the table, helping you make smart financial moves.
What Is the Instant Asset Write-Off?
The Instant Asset Write-Off (IAWO) lets you claim a tax deduction for the full cost of eligible business assets, up to $20,000, in the year you first use or install them.
That’s right—no waiting around for years to depreciate your assets. You get immediate relief, which means more cash in your pocket, quicker.
Here’s how it breaks down:
- Multiple Assets: Got your eye on a few different pieces of equipment? No problem. As long as each item costs less than $20,000, you can write them all off.
- New and Second-Hand: It doesn’t matter if it’s brand new or pre-loved; both qualify.
- Cost Additions: If you’ve previously written off an asset and now you’re adding something to it—like, say, a shiny new bucket for your excavator—you can also instantly write off that cost, as long as it’s under $20,000.
Example: let’s say you bought an excavator a couple of years ago and claimed the full cost under the temporary full expensing rules. Now, you’ve added a $19,000 bucket to it. You can instantly write off that bucket in your 2023–24 tax return because it’s under the threshold.
Or, if you splurged on a $4,500 MIG welder that was ready for action by May 2024, you can write off the entire amount too, assuming it’s for business use only.
To get in on the action, though, you’ve got to follow the simplified depreciation rules.
Eligibility can be a bit of a moving target, depending on when you bought and started using the asset, so it’s always smart to double-check the details.
Who’s Eligible for the Instant Asset Write-Off?
So, you’re ready to dive in—but is your business eligible? Let’s break it down:
- Aggregated Turnover: Your business needs an aggregated turnover of less than $10 million. That’s the sum of your business’s annual turnover plus any connected or affiliated businesses.
- Purchase Date: The asset needs to have been purchased and first used or installed between 1st July 2023 and 30th June 2024.
- Asset Cost: And, of course, the cost of each asset needs to be under $20,000.
Still not sure? No worries—you can check out the full details on eligibility and thresholds by visiting the ATO’s Instant Asset Write-Off thresholds for small businesses.
Maximising Your Write-Off
At MAD Wealth, we’re dedicated to ensuring you make the most of the instant asset write-off.
Our team carefully tracks all your asset purchases, making sure each one is accurately recorded with the correct purchase dates and costs.
When the financial year wraps up, we’ll highlight any equipment purchases and their eligibility to ensure the necessary requirements are met and make sure all eligible assets are claimed in your tax return.
This proactive approach not only ensures compliance but also optimises your tax outcomes, allowing your business to fully benefit from the instant asset write-off.
MAD Wealth’s Role
If you’re not currently taking full advantage of the instant asset write-off, now’s the time to change that.
At MAD Wealth, we’ll guide you through the nitty-gritty of tax deductions and make sure your business is set up for success. Let’s have a chat about how we can keep your asset purchases and records up to date, so you get the most out of this sweet tax incentive.
The instant asset write-off is your chance to boost your business without waiting years to see the benefits.
Don’t let it slip by—reach out our team today, and let us help you make the most of every dollar.