The Small Business $20k Tax Break Explained

By April 12, 2016 November 1st, 2019 No Comments
Small Business Tax Break - Leafcutter

In 2015, the federal government announced a big tax break for small businesses. The new legislation allows small businesses to claim an immediate deduction for assets they start to use – or have installed ready for use – so long as each depreciable asset costs less than $20,000. This change temporarily replaces the previous instant asset write-off threshold of $1,000 until 30 June 2017.

Who’s eligible for it?

If you own or run a registered business and it turned over less that $2 million in revenue, you’re eligible for an immediate $20k tax break in the same financial year.

How does it work?

You can claim the full amount from your income to reduce your tax bill, there is also no limit on the number of items a business can claim. Examples include cars, vans, utes, trailers, motorbikes, lawnmowers, ovens, fridges, coffee machines, other machinery, kitchens, tables and chairs, carpets, printers, photocopiers, tools, welding equipment, saws, generators, pumps, solar panels, heating, hot water units, water tanks, airconditioning units, sound and security systems, computers – any item used for running the business – will be 100 per cent tax deductible.

You cannot use the money to buy stock for your business. Horticultural plants and in-house software added to a development pool also do not qualify.

If you do not use a software development pool to claim deductions, you may be able to claim a new $20k website under the ‘simplified depreciation rules’.

Who should I speak to?

We recommend you speak to your qualified tax advisory or accountant about how the tax break can work for you. If you believe you’re eligible, the team at Leafcutter are on hand to help build your company website or mobile app.

Check out this handy infographic courtesy of

Small Business Tax Break - Leafcutter

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