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coreyjking(Newbie)Newbie
22 May 2024

Hello everyone.

I am currently a computer science student, and decided to start my own software development project. I have an ABN for a side hussle where I sell things online. I want to code custom software to automate and improve much of this - with the possibility of selling subscriptions to this software down the road.

However, my current laptop can barely load google chrome, let alone much else. Am I allowed to buy a new laptop, and over time deduct the depreciation of the laptop from my taxes?

Thanks,

Corey

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5,280 views
3 replies

Most helpful response

Most helpful replyATO Certified Response

Taxduck(Taxicorn)Taxicorn
ATO Certified Response22 May 2024

If an asset purchased is used for income producing purposes then the expense is deductible off that income. If the asset is also used privately then the expense has to be proportioned so that only the business use of the asset is claimed.

I am sure you can determine whether the laptop purchased is used in your business. If it is then you can claim under the instant asset write-off for assets up to $20,000 if you wish. (or claim over effective life of 2 years)

Here is some information on claiming assets as an individual.

https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/tools-computers-and-items-you-use-for-work/depreciating-assets-you-use-for-work/assets-costing-more-than-300-dollars#Effectivelifeofadepreciatingasset

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Most helpful replyATO Certified Response

Taxduck(Taxicorn)Taxicorn
ATO Certified Response22 May 2024

If an asset purchased is used for income producing purposes then the expense is deductible off that income. If the asset is also used privately then the expense has to be proportioned so that only the business use of the asset is claimed.

I am sure you can determine whether the laptop purchased is used in your business. If it is then you can claim under the instant asset write-off for assets up to $20,000 if you wish. (or claim over effective life of 2 years)

Here is some information on claiming assets as an individual.

https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/tools-computers-and-items-you-use-for-work/depreciating-assets-you-use-for-work/assets-costing-more-than-300-dollars#Effectivelifeofadepreciatingasset

Liked by coreyjking
coreyjking(Newbie)Newbie
24 May 2024

Thanks so much :) very helpful.

Another general question about deductions: assume my business makes a loss or no profit before tax time (which is coming soon). Can I apply the deduction to any of my taxable income (I have a job also), or can it only be applied on the taxable income generated by the asset itself (my sole trader business income).

Thanks :)

Liked by coreyjking
Taxduck(Taxicorn)Taxicorn
25 May 2024

If you make a business loss (business expenses more than income) then to claim the loss off other taxable income you have to meet the income requirement and one of the 4 non-commercial loss rules.

https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/losses/non-commercial-losses

If you don't meet that then the loss is deferred and claimed off business income next financial year.

Liked by coreyjking

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