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Instant Asset Write Off

instant asset write off tax lawn mowing business
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Bruce
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Instant Asset Write Off
#1

Well we seem to have a unique little opportunity here with the latest budget.

 

For a window of time we can write off 100% of the value of a newly purchased business asset, instantly, no depreciation over years - for a value of up to $20K.

 

So the question is... is anyone planning on any new purchases because of this new rule?

 

Utes, mowers, trailers?

 

For me, I'm not planning on buying anything new because of the rule, though we still have another 4 weeks till the end of the financial year, and we still have quite some time to come as well. So I'm not ruling anything out - I'm just not going out to buy anything which I don't need because of this new ruling.

 

I'm just taking things as usual, anyone got anything on their shopping list ??


Posted 28 May 2015 - 09:17 PM

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Rusty
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Instant Asset Write Off
#2

Yes good point.

Think i'll pick up a new Rover 22" tomorrow.looking at trying out a Kohler motor for a change.Not too sure what history is on those kohler engines.Due for new trailer because of rust.Yep i'll spend a few grand.

 

Just curious to what dates the govt. gave out from start to finish on this offer ?


Posted 28 May 2015 - 10:05 PM

Bruce
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Instant Asset Write Off
#3

Sounds great Rusty, I still have my eye on that mulcher / shredder I wanted, and may still get it this year too, I'll look at my financials first though, otherwise it can wait till next financial year.

 

12th of May 2015 until 30 June 2017 are the dates.

 

So this is a decent window of 2 years.

 

I think a lot of people and businesses are going to borrow a lot of money over these 2 years to take advantage of these tax write offs.

 

All I see ahead for Australia is a lot of debt, and a lot of increased tax liability once this offer ends.

 

Me, I will buy what I need and nothing more. If it's a treat to make my work easier or to branch out a little further, or if it's better to bring a purchase on earlier because of these new rules, I will do it, and I will take full advantage. But I will not borrow money, and I will not have any pie in the sky dreams of some big business if only I buy all these things during this window.

 

I would just urge caution here, and continue to run our businesses as usual and with the usual common sense, and we'll be OK.


Posted 28 May 2015 - 11:02 PM

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Bruce
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Instant Asset Write Off
#4

I think of it this way too...

 

Imagine 1 million Australians borrow $20K a year for 2 years for this tax write off.

 

That's 40 billion dollars of debt added to the economy in 2 years.

 

And thats not just us people who borrow the money that need to pay interest, it's national debt too.

 

Use the system to your advantage.

 

But don't let the system take advantage of you.

 

Just my thoughts.


Posted 28 May 2015 - 11:17 PM

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Rusty
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Instant Asset Write Off
#5

Picked up new Rover 22 inch w/Kohler engine,new Stihl blower.Ordered new trailer to be made to specs and a cage to be fitted.Purchased new 5.5 Honda engine for another machine.Spent over $3000


Posted 29 May 2015 - 04:18 PM

wombat
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Instant Asset Write Off
#6

I think you a "right on the money" Steve. I will proceed with caution as usual. By all means take advantage of the rules as they apply at the time but I won't be borrowing money to do so. These changes still need to be passed by the Senate don't they?


Posted 30 May 2015 - 12:33 AM

Bruce
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Instant Asset Write Off
#7

Sounds like you're taking full advantage Rusty  ;)

 

Not sure about the Senate Wombat ?? Thought they were passed and ATO is implementing them already ??

 

I'm still flat out at the moment, hoping to have the time free to go through my books before 30 June to see exactly where I'm at with things, and then make a decision one way or the other as to any other purchases or upgrades I may make.

 

This whole thing looks good but it still doesn't sit right with me. I've said before that my Assets Pool / Depreciation Schedule was running low already and that's why I did some upgrade purchases already this year. But no matter what I buy in the next two years it's going to be written off instantly - which leaves me with an empty assets pool in 2018...

 

Which means I spend even more to rebuild that assets pool - or pay more income tax.

 

So I need to spend for two years to get any depreciation, and then I have to spend for another year or two to rebuild a depreciation schedule that will last for the next couple of years past that... thats 3-4 years of heavy spending...

 

Arrrggg........ there aint that much I need to buy to run my business.

 

I could replace every machine and tool I own in the next 2 years, and would not need to replace anything in 2018 - 2020 at all, and I would be running with a zero depreciation schedule - leaving me with only mower fuel and car expenses to claim  :angry:

 

The more I think about this - the more unsettling it becomes - I can only think of 2 old sayings:

 

If it's too good to be true - then it is...

 

There's no such thing as a free lunch...


Posted 31 May 2015 - 11:37 PM

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sandgroper
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Instant Asset Write Off
#8

lots of depreciation left on my ute plus a few goodies brought during the year.

If we all depreciate everything to its full amount this year what about next year?

Like Steve said mower fuel and car expenses next year ouch.   


Posted 01 June 2015 - 12:18 AM

wombat
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Instant Asset Write Off
#9

Two things in this life are guaranteed:

Death and Taxes.

We may be able to prolong the results somewhat but they will both get us in the end.

Don't take me wrong, I am not a negative person by any means but I am a realist (I Think).


Posted 01 June 2015 - 01:40 AM

Iand
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Instant Asset Write Off
#10

Remember it's only a tax deduction not a rebate

If you're on 30% tax rate and spend a $100 then you don't pay tax on this $100,it will still cost you $100 and $70 after the deduction so unless you need it or are going to need it then it's a false sense of saving


Posted 01 June 2015 - 08:08 AM

Anything Ian says may or may not be garbage, it may also be his own opinion or it may not be his opinion at all, it may just be something he felt like stating anyone following his advice does so at their own risk and may be doing something Ian would actually advise against smile.png


Rusty
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Instant Asset Write Off
#11

Spending $2000-$3000 in a business as a upgrade for small machinery is peanuts.Yes you do need to spend money to make it.

i won a set of units (9) a few weeks ago as the previous contractor would sometimes go missing for a few weeks as his mower or trimmer was down for repairs,not really a pro way to run.

If anything goes a mis reach for the spare.No down time unless it's weather or health.

It's one of the easiest businesses to run with small outlay.So a couple grand every few years is small for a full time business and when the acct is saying you need to spend and i did $21,000 on a new vehicle few weeks back.


Posted 01 June 2015 - 09:33 AM

Bruce
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Instant Asset Write Off
#12

Hehe... yeah I wish it were a rebate Ian, now that would be a sweet deal  :D

 

I've been wondering if we can opt out of the instant asset write off if it's not suitable for us? Or just 100% write off some things, and leave other things on the usual multi-year depreciation schedule?


Posted 01 June 2015 - 04:38 PM

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Rusty
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Instant Asset Write Off
#13

Heard a advertisement on the radio with Aust Govt saying the offer is there and harvey norman saying if you got a ABN to come in and take advantage if you qualify.

 

PS

Seen Govt. ad on TV last night.


Posted 01 June 2015 - 05:58 PM

Dan Clynk
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Instant Asset Write Off
#14

Really good thoughts guys. Im wondering if this is perfect for a new guy like me, 3 months in to get some better gear to help sustain my business in the long term.

I see it as a perfect opportunity to get the better snipper, invest in a better trailer with a ride on option for the future. Im up to 42 customers so far, gaining a couple each week.
Posted 07 June 2015 - 01:23 PM

Bruce
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Instant Asset Write Off
#15

Dan, it would all depend on your expected turnover for the year, and whether or not you would be expecting to make a profit or loss in your first full financial year of 2015-2016. You may find that your expenses and what you can claim already might be higher than you think.

 

If after your start up revenue and your deductions that you expect to earn less than the tax free threshold, then there's not much point because you'd be saving nothing in tax. And if you are now or will be doing any other part time work in this year - then any business loss is not deductible from wages from the other job.

 

But if you are looking at substantial and fast growth with a tax liability - then it may definitely be worth it.

 

Clock is ticking for me to make a decision for myself, still overloaded with things atm, 3 weeks to see where things stand and go from there...

 

Sounds like the business is coming together. Well done !!


Posted 07 June 2015 - 09:33 PM

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Dan Clynk
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Instant Asset Write Off
#16

Sounds like i have a hell of a lot more to learn about running my business.

 

I was thinking when i crack the 100 customer mark, maybe a good time to spend a bit on a good trailer set up, Ill keep at it with what i have now, stick to the part time work and keep building my customer base. It's a wonderful learning curve, hopefully the chat with the tax accountant this year can point me towards some things i can improve on.

 

Thanks for the heads up Steve

 

Dan


Posted 08 June 2015 - 09:36 PM

Bruce
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Instant Asset Write Off
#17

Rules etc change all the time, and I have no idea what your own situation is. Myself personally, I would be getting together a rough estimate of what I've earned, how much I've spent on tools and machinery, and KMs travelled (car travel is a big write off), and take that to the accountant asap - with any other wages slips from a previous job - and they'll put you straight in a few minutes with what's what, and tell you whats best.

 

It might save you this year, or it may not? It won't take much to find out.

 

Instant asset write off goes for another two years, so there's heaps of time for a new business to use it to full advantage over the entire 3 financial years, while also naturally adding to assets to build the business over the same time.

 

Best time to build a new business seems to be right now - just remember though - you'll have an empty depreciation schedule once this ends, which means either more spending on more machinery or paying a lot more tax from 3 years forward.


Posted 09 June 2015 - 11:50 PM

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Iand
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Instant Asset Write Off
#18

One of the better articles i have read regarding the tax write off and the actual end cost

http://www.brw.com.a...NoBF9GhyIltqe3O


Posted 10 June 2015 - 07:41 AM

Anything Ian says may or may not be garbage, it may also be his own opinion or it may not be his opinion at all, it may just be something he felt like stating anyone following his advice does so at their own risk and may be doing something Ian would actually advise against smile.png





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