Attention all business owners! The 2020 instant asset write-off for taxpayers has been extended for another 6 months due to the COVID-19 pandemic. A significant increase in scope was implemented amid the coronavirus economic crisis. All businesses with yearly profits of up to $500 million will be able to write off assets worth up to $150,000.
The Australian government has implemented a tax extension that could save you thousands of dollars in tax write-offs. Treasurer Josh Frydenberg said that the 2019 arrangement which was slated to end on July 1, 2020, would continue until the end of 2020. Millions of businesses are expected to be able to utilize these tax write-offs in order to invest in their business.
Businesses will now have the privilege of the write-off through the end of 2020, instead of the original term which would have ended on July 1, 2020. This is a great time for businesses to begin making investments to improve the productivity of their business and staff amidst the coronavirus pandemic. Once COVID-19 restrictions are eased, the economy will pick up and businesses will need to invest in equipment to boost productivity and output to meet demand.
Some see this extension as a way to further extend the deliberation of permanent enforcement of the instant asset write-off scheme. It is not guaranteed that this extension will last through coming years, so business owners are urged to take advantage of this generous tax write-off opportunity while it is in effect.
Make use of this opportunity and take this chance to invest in assets that can be written off in your 2020 taxes. The write-off scheme allows businesses with income and turnover of up to $500 million to claim and write-off purchases for assets with a value up to $150,000 in their tax returns.
Businesses’ Instant Asset Write-Off Boosted To $150,000
Last year, following the extension of the instant asset write-off, government officials pitched to increase the write-off allotment to $30,000 for SMEs. This year, the Instant Asset Write-Off scheme has not only been extended by 6 months, the write-off amount has increased to $150,000, for businesses with profits of up to $500 million.
The revised write-off initiative was announced in March by the Australian government. The new rules open up the write-off initiative to larger scale businesses, increasing the annual revenue limit from $50 million to $500 million. This proposed change opens up great opportunities in particular for small and medium scale SMEs, as well as all businesses. Businesses will be able to take advantage of this offer by claiming a write-off for every business related purchase made through the date of approval through the end of 2020. Business owners have the potential to greatly benefit from this write-off scheme. The newly extended scheme opens up this write-off opportunity for over 3.5 million new businesses which will be eligible for the program based on the revised guidelines. This is in addition to the hundreds of thousands of businesses who have benefitted from the instant asset write-off throughout Australia.
During his announcement, Treasurer Frydenberg commented on the current needs of Australian SMEs during the coronavirus pandemic and its accompanying effects on the Australian economy, mentioning that the government is aware that businesses see the need to invest in equipment and machinery at this challenging time.
Many SMEs Are Unaware Of This Scheme
The key to SMEs and taxpayers benefitting from the write-off scheme is knowing that it exists, and understanding what types of purchases can increase the company’s productivity, and serve as a write-off under the scheme. A recent survey shows that although over hundreds of thousands of businesses throughout Australia have benefitted from the write-off, nearly 50% of SME owners were unaware of the opportunity. There is a significant group of small and medium-sized businesses who are completely unaware of the write-off scheme. Small business owners throughout Australia have pushed for initiatives to spread awareness of the opportunity, and they are also aware of the responsibility held by accountants to inform their clients about opportunities and tax schemes. Ultimately, the increase in the instant write-off initiative can greatly improve the cash flow for Australia’s small business owners. With this in mind, business owners should take steps to make sure they are properly educated and updated on all changes within the government and treasury.
Business owners should be aware of bringing tax deductions to the forefront of financial discussions in an effort to increase small-business activity and investments. It is also recommended for owners to begin considering purchases that will increase the productivity within the workspace. The time is now to replace faulty systems, upgrade assets, and invest in new office materials and furniture that will benefit the business.
Invest In Your Business With Tax Deductions
The time is now for small to medium-sized business owners to benefit from investments with tax deductions. Business owners are encouraged to gain a clear understanding of how the deduction process works, and what are some smart purchases to make to benefit their company as they budget for 2020. Business owners are advised against taking out loans to make tax-deductible purchases, instead, proper budgeting and planning are encouraged.
Business owners and community representatives have urged the government officials to aid micro-businesses and new business owners with financial incentives and rebates for smaller purchases. Previously, the government has also resisted efforts from small business owners to get the write-off approved as permanent. With this in mind, it is important for small business owners to take advantage of the write-off opportunity before the deadline of the end of 2020.
Business owners are encouraged to review the needs of their company and employees to identify tools that will help the company grow and ultimately benefit from the write-off. Alternative working stations and programs are recommended as practical investments for the workspace.
Purchase Assets For Instant Asset Write-Off
Australians have an opportunity to save money, receive deductions on taxes, and increase the productivity of their business. Create a list of purchases and services that could benefit your small business today. Start by considering the purchase of a height-adjustable standing desk, with the productivity and health of your employees in mind. A standing desk is a major purchase that could ultimately increase the productivity of any SME. If business owners haven’t taken advantage of this offer yet, now is the time.
Government officials have been extremely generous, as this is a significant increase of tax deductions offered in this tax break.
Prior to the Instant Asset Write-Off scheme, it was much more difficult to receive taxes back from write-offs over the amount of $1000. A deduction on a standing desk purchase will be considered within the current instant asset write-off scheme as long as you purchase it before the end of 2020.
Standing desks are proven to increase the productivity and health of employees of small business owners. Business owners are urged to take advantage of the government’s write-off extension by purchasing a Zen Space desk before June 30th.
A Zen Space Desk could be the perfect purchase for your business. Be sure to order yours before the deadline!