The Australian Government has announced that the $20,000 Instant Asset Write-Off (IAWO) for small businesses will be extended until 30 June 2026. This extension is great news for eligible businesses wanting to invest in new equipment or assets to help their operations grow.
Key points to know:
- Eligibility: Small businesses with an annual turnover of less than $10 million.
- What’s covered: You can immediately write off assets costing less than $20,000 (excluding GST). This means you can claim the full amount as a tax deduction in the same financial year.
- Per-asset basis: The $20,000 limit applies to each individual asset, so you can write off multiple assets if each one is under the threshold.
- Timing: The asset must be first used, or installed ready for use, between now and 30 June 2026.
- Assets over $20,000: Assets costing $20,000 or more can still be added to your small business depreciation pool and depreciated over time at the standard rates.
Why this matters:
This extension gives small businesses a valuable cash flow advantage. It allows you to invest in tools, machinery, vehicles or equipment when you need them, while reducing your taxable income in the same year.
What you need to do:
- Make sure any asset purchases meet the eligibility criteria.
- Keep accurate records and invoices for any claims.
- If you’re considering larger purchases, speak to us first so we can help you plan and maximise your benefit.
If you’d like to understand how this extension could work for your business or need help with your tax planning, our team at DGL Accountants is here to help.
Get in touch with us to discuss your options and make the most of this opportunity.