Everyone knows the secret to any good tax time is planning. At Hoffman Kelly, we’ve got all the tips on how you can make this tax time a smooth experience.
Our third instalment of ‘Tax Ready with Hoffman Kelly’ is all about assets. More specifically, the Temporary Full Expensing (TFE) of depreciating assets.
The TFE of depreciating assets gives businesses the opportunity to immediately deduct the business portion of the cost of any assets in the year it is first installed or used. The best part: it has officially been extended to include the 2022-23 financial year. For many businesses coming up to tax time, it’s a chance to look at any purchased or installed assets and gives the opportunity for long-term planning.
Due to asset delivery delays caused by COVID, the previous end date for the TFE would’ve meant many businesses would miss out. The extension gives your business the opportunity to think well into the next financial year for any large cost asset purchases.
If your business has an aggregated turnover of less than $5 billion, you are able to claim the full cost of a new eligible asset as long as it is installed or first used before 30th June 2023 (although if it is ready to use after 30 June 2022 the claim will be in the 2023 tax return). Unlike the Instant Asset Write-Off, there is no threshold for the TFE, and eligible claimants can claim a full deduction, irrespective of the cost.
For businesses with an aggregated turnover under $50 million, you also have the opportunity to claim the full cost of a second-hand asset purchased before EOFY 2023.
There are a few other rules (e.g. the normal vehicle depreciation limit still applies), so we recommend getting in touch to confirm any purchase will be eligible before you commit to it.
For big businesses, that exceed the $5 billion threshold, all is not lost! You may still be eligible for temporary full expensing if you meet the alternative income test.
Tax Ready with #HoffmanKelly
At Hoffman Kelly, we are dedicated to supporting clients and assisting them to reach their full potential. Read the first article of our series Tax Ready with #HoffmanKelly: Loss Carry Back Tax Offset.
Get In Touch
Set yourself and your business up for success in the coming financial year (as well as the coming EOFY). Contact Hoffman Kelly to discuss and plan around any assets you are thinking of purchasing before 30th June 2023. Call us on (07) 3394 2311 or click ‘Contact Us’.