Small business tax break

The 50% tax deduction for small businesses (turnover under $2 million) announced in the Federal Budget has now been given royal assent so it is law. That means, eligible purchases over $1,000 can be added to your tax return as a 50% deduction.

Note that this is a bonus as you can still claim any depreciation and deductions you would otherwise be entitled to.

So if a purchase was already something you had planned this year (the deadline is 31 December 2009) it’s great news; if a purchase was a possibility or planned for early next year, considering buying it now is now more affordable. However, if cashflow is a problem and/or you don’t really need any $1,000 purchases, forget the tax break and spend your money elsewhere!

Is this tax deduction affecting your spending?

I am about ready to upgrade my computer so this tax break could be well timed for me – yes I could buy a computer for under $1,000 anyway but I want reliability, a large screen and various features (such as mobility, i.e. a laptop) that will make life easier for me.