In real terms, this means commercial vehicles that were once purchased over $30,000 would have to be written off over a number of years using depreciation.
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The previous limit of $30,000 has now been increased to $150,000. The federal government recently announced an increase in the threshold for the cost of small business assets eligible for immediate tax write-off. Make use of the $150,000 small business instant asset write-off provisions All of this can make thousands of dollars difference to the deductions reported at the end of financial year. A specialist will be able to more accurately value assets, assign effective lives, utilise low cost and low value pooling and immediate write-off provisions to more aggressively claim. Depreciation specialists must also be registered tax agents with the Tax Practitioners Board. Not all quantity surveyors are depreciation specialists. Ensure your depreciation schedule has been prepared by a specialist quantity surveyorĬonstruction and assets for small businesses can be very different to those we see in residential homes, and for the best results we recommend using a depreciation specialist. Without an up to date depreciation schedule prepared by a quantity surveyor, deductions for depreciation will not be maximised for the small business owner. Some businesses rely on their accountant to ensure depreciation is accounted for, however accountants are not qualified to estimate construction costs or assign new effective lives and values to second-hand plant and equipment items. In this case, businesses should have a quantity surveyor complete a new and up to date depreciation schedule with new effective lives and asset values to maximise the depreciation still available. This is not ideal as the previous owner will have already depreciated the assets as aggressively as possible before sale. Sometimes businesses are using an inventory list they inherited from a previous owner. A depreciation schedule reports the deductions available each year for the depreciation of any building works, business fit-out and included business assets. So often we see small businesses that have been operating for years with an out of date depreciation schedule, or sometimes with no depreciation schedule at all. Make sure you have an up to date small business depreciation schedule Here we are going to highlight 3 tips for maximising asset-related tax deductions for small business through depreciation and instant asset write-off.
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Remember, the higher the deductions, the less tax payable. Whilst we spend and work hard on generating revenue every month to boost the bottom line, one of the easiest things we can do as a small business is to maximise the tax deductions available to us at the end of financial year. Cash flow is the lifeblood of any small business.