Instant Asset Write-off is now 2024 law

Eligible businesses with a total annual turnover of less than $10 million may deduct the full cost of eligible assets costing less than $20,000, instead of depreciating them over several years.  This is known as Instant Asset Write-Off (IAWO).

This $20,000 threshold applies on a per-asset basis, meaning that businesses can write off multiple assets.

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Eligible assets can be new or second-hand.  However, they must be first used or installed and ready for use between 1 July 2023 and 30 June 2024.

IAWO is one of several asset depreciation methods available to small businesses, and has been offered under changing conditions since 2011.  However, IAWO was suspended when Temporary Full Expensing (TFE) was available.  TFE ended on 30 June 2023.

The usual rules for claiming deductions still apply: only the business portion of an expense can be claimed, and records must be kept to verify the expense.  This write-off provides immediate tax relief, helping to reduce taxable income for eligible businesses.

More information about the IAWO for eligible businesses – including eligibility criteria – can be accessed on the ATO website, linked here.

The current Financial Year: 1st July 2024 to 30th June 2025

The recent Budget announced that the IAWO measure will continue into this year.  However, it is not yet law and is subject to parliament’s process.

How can QiBalance Bookkeeping help with instant asset write-off?

Bookkeepers play a crucial role in managing business finances, including tracking asset purchases and installations.  QiBalance Bookkeeping can ensure that client asset transactions are recorded with precise purchase dates and costs.  We monitor clients’ asset costs to determine whether they fall below the relevant threshold for the instant asset write-off (IAWO).

At the end of the financial year, equipment purchases are clearly presented for Tax Agents and/or Accountants.  This ensures that all eligible assets can be correctly claimed in client tax returns which in turn maximises potential benefits that clients receive from the IAWO.

Throughout the year, QiBalance Bookkeeping maintains thorough documentation and accurate records.  This facilitates the process of asset depreciation, ensures regulatory compliance and enables optimal client tax outcomes.

If you would like to know more about how QiBalance Bookkeeping can help you with asset depreciation and instant asset write-off for your business or for a client’s business, you can contact us for a discussion.  QiBalance Bookkeeping can help you explore the value of gaining maximum business results by having your bookkeeper keep asset purchases and important asset records up to date.

Disclaimer: This blog post is a summary of a newsletter produced by the Institute of Certified Bookkeepers and distributed by members. All or any advice contained in this article is of a general nature only and may not apply to your individual business circumstances.

For specific advice relating to your specific situation, please contact your accountant or contact QiBalance Bookkeeping for further discussion. 

The Institute of Certified Bookkeepers 
Tel: 1300 856 181 
Email: admin@icb.org.au