ATO gives us a (tax) break!

The Federal Government is funding a 30 percent investment tax break for all Australian businesses - small business in particular - but only until the end of this financial year.

The $2.7 billion "Business Tax Break" is an element of the Government's $42 billion economic stimulus package.

The Small Business and General Business Tax Break will mean;
- A small business that buys and installs a $2000 computer before the end of June 2009 can claim an additional $600 deduction in its 2008-09 tax return.
- A business that buys and takes possession of a $60,000 photo printer by the end of June, 2009 can claim an additional $18,000 deduction in its 2008-09 tax return.

Small businesses can claim an additional 30 percent tax deduction for eligible assets costing $1000 or more that they acquire from December 13, 2008 to June 30, 2009, and install by June 30, 2010.

For eligible assets costing $1000 or more that they acquire from July 1, 2009 to December 31, 2009, they can claim an additional 10 per cent deduction where they are installed by December 31, 2010.

To benefit from this tax break a small business must have a turnover of $2 million a year or less.

Other businesses can receive the same deductions for eligible assets greater than $10,000.

Assets eligible for the allowance are (deep breath): "new tangible depreciating assets and new expenditure on existing assets used in carrying on a business for which a deduction is available under the core provisions of Division 40 (Capital Allowances) in the Income Tax Assessment Act 1997."

More detailed information can be found on the ATO's website, "Businesses" section, or by consulting your accountant.

(Thanks to Bruce Pottinger, managing director of L&P Photographics, and PMA for bringing this to our attention.)