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Carrying forward tax deductions

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Newbie

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Im contemplating setting up a small business in baking. I have already spent money on utensils and equipment to experiment on products. The business won't kick off until next financial year. Can I claim deductions on what I have already spent in next financial year's return? 

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Taxicorn

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As you are not carrying on a business at the moment you can not claim them this financial year.

 

You can not outright claim them in next years either.

 

You could depreciate them until you start to use them and use that reduced figure.

Given that the end of the financial year is very close, the reduction shouldn't be too much.

 

You could also start the business before the end of the financial year and then claim them against zero business income.

They will yield a carry forward business loss for you to use the next financial year.

Have you applied for an ABN yet?

 

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Best answer

Taxicorn

Replies 2

As you are not carrying on a business at the moment you can not claim them this financial year.

 

You can not outright claim them in next years either.

 

You could depreciate them until you start to use them and use that reduced figure.

Given that the end of the financial year is very close, the reduction shouldn't be too much.

 

You could also start the business before the end of the financial year and then claim them against zero business income.

They will yield a carry forward business loss for you to use the next financial year.

Have you applied for an ABN yet?

 

Newbie

Replies 1

Yes I have an ABN. No individual items have exceeded $300 and according to ato such amounts are deductable in full rather than depreciatable. I don't want to make any claims this financial year in case I dont go forward with the business. So basically i take it I should wait another month before spending any more on this venture. 

Taxicorn

Replies 0

Businesses can claim up to $30,000 without depreciating.

 

However, the items were not initially used in business and everything depreciates from the moment you bought them.

So you would claim, in full, the remainder next financial year.

 

Probably best to wait until after June 30.

 

 

 

 

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