$20,000 instant asset write-off for small business
Taxpayers who have purchased or are purchasing a business asset this financial year should remember that the instant asset write-off limit is $20,000 for the 2025 income year.
If a taxpayer’s business has an aggregated annual turnover of less than $10 million and they use the simplified depreciation rules, they may be able to use the instant asset write-off to immediately deduct the business part of the cost of eligible assets, as follows.
- The full cost of eligible depreciating assets costing less than $20,000 that are first used or installed ready for use for a taxable purpose between 1 July 2024 and 30 June 2025.
- New and second-hand assets can qualify, although some exclusions and limits apply.
- If the taxpayer claimed an immediate deduction for an asset’s cost under the simplified depreciation rules in an earlier income year, they can also immediately claim a deduction the first time they incur a cost to make an improvement to that asset if it is incurred between 1 July 2024 and 30 June 2025 and less than $20,000.
- The $20,000 limit applies on a per-asset basis, so taxpayers can instantly write off multiple assets as long as the cost of each asset is less than the limit.
The usual rules for claiming deductions still apply. Taxpayers can only claim the business part of the expense, and they must have records to prove it.
The $20,000 instant asset write-off is now available for eligible assets purchased and installed before 30 June 2025.
For detailed information and to determine your business’s eligibility, refer to the ATO’s official guidance or contact Omnis Business Advisory in West Perth on 08 9380 3555.
