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 each of 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 (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.
The ATO has updated their information on simplified depreciation to make it easier for you to understand and know what assets are eligible; see the link below to continue reading.
Find out more: Simpler depreciation for small business.