As we head towards the end of the tax year, many small businesses are looking to get their tax affairs in order and put in place some last minute plans to reduce their tax burdens” – Mark Chapman.
There are numerous tips a small business can put into practice to reduce its taxable profit, including deferring issuing invoices until the new tax year, accelerating expenses payments and even pre-paying some of the next year’s operating costs, like insurance policies. With perfect and on time Business And Tax Planning in Richmond Hill, you can enjoy a lot of benefits.
However, a year after it was first introduced one of the best tax breaks for small business remains the $20,000 instant asset write-off. With many businesses offering End of Financial Year promotions, this is the ideal time for small businesses to take benefit by acquiring some much desirable capital assets and, at the same time, dipping their taxable profits.
So, as a quick refresher, what are the key features of the instant asset write-off?
- Businesses can buy any items of machinery or equipment for use in their business, provided the cost of each asset is less than $20,000. This could include motor vehicles, office furnishings, items of technology like laptops, mobile phones and tablets, and kitchen utensils.
- It is even doable to claim items like TVs, gym equipment, works of art and computer gaming consoles, provided they are used for business purposes, for instance, in work recreation areas or office receptions. If you are claiming left-field deductions like these, make sure you keep suitable records!
- Only small businesses can claim the deduction. That means that to qualify, your business needs to have an aggregate annual turnover of less than $2 million.
- Only resources valued at $20,000 or less (excluding GST) qualify for the instant deduction. So, if the value of the asset is greater than $20,000, the asset will be depreciated over a number of years.
- The deduction is available for both new and second-hand assets.
- If numerous items are purchased and each costs less than $20,000, the whole cost of each item can be written off right away.
Suppose you are operating your business both from Richmond and Thornhill. In that case, declare your assets in both areas after consulting your tax consultant who has to be a certified professional accountant and understands the entire tax preparation process. CPA Mohan S Rekhi is one such professional accountant who can go ahead and help you in Tax Return Preparation in Thornhill and other locations across GTA. Call him for further details. Do it now!