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Re: Sole Trader Asset Write Off E-Tax ?where?

Devotee

Views 612

Replies 6

Hi there, 

I've ran into difficulty finding the section for instant asset write off for my business expenses.
In my case I have a tablet I purchased for business, but ended up using it 25% for my business.
Instead of calculating depreciation, i'm hoping to find where to input this 25% of cost as instant write off for the year of purchase.

Does this field have a complicated name or am I just looking for a field named "instant asset write off" on E-Tax?

Kind regards

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Most helpful response

ATO Community Support

Replies 3

Hi @treefairy,

 

It looks like you've overcomplicated it for yourself! Let's break it down.

 

The $300 immediate deduction limit you're referring to is for non-business assets. That means non-business income related deductions - employees claiming deductions, that sort of thing.

 

The depreciating assets for small businesses are different! For the instant asset write-off, thresholds change each year. As of 12 March 2020, the threshold is $150,000. For the rest of the 2020 financial year, it was $30,000.

 

Under the instant asset write-off, each asset under the threshold can be, well, instantly written off. This applies to each asset and for the business portion. This includes your tablet.

 

Here's how to declare it in myTax:

  • On page 4: prepare return, scroll to Business/sole trader, partnership and trust income (including loss details)
  • Select Add/Edit

  • Scroll to net non-primary production income or loss or not primary production income or loss (whichever is applicable)

  • Enter the depreciation amount under the label Depreciation expenses – manually calculated

  • Scroll to Other business and professional items

  • Enter it again under Small business entity simplified depreciation – Deduction for certain assets

6 REPLIES 6

Devotee

Replies 5

I found "Small business entity simplified depreciation – Deduction for certain assets"
and "Termination value of intangible depreciating assets" or "Termination value of other depreciating assets"

 

Again i'm unsure.

This is just to write off 25% outright of a tablet purchased and used in that year 25% for business. I still use the tablet currently for sales, storing digital assets and tracking news.

Devotee

Replies 4

Well I looked into it more and unfortunately I don't think I can claim the tablet, as it cost $310 second hand.

I bought it for business and at one point used it mostly for business. I was checking and making trades on the bus to Uni, and at Uni checking my positions. I also have crypto wallets on the tablet, some of which were staking in Trust Wallet.

The issue is later I became proficient enough at my routine (checking news on cryptopanic, coinmarketcap app and portfolio checker) that I have to say I used the tablet less and less for work as I could multi-task personal task interwoven into these activities.

Sure every day I used the tablet atleast once or twice to check my trading and keep upto date with cryptocurrency news, but the time this took was less and less.

Figuring out 25% of the depreciation rate for something I stopped using the next year as I gave up trading in favor of study and in favor of avoiding how much time I was waisting trying to come to terms with all of my accounts of the activities I undertook the year before... it just isn't worth my time.

The ATO seems to be very specific about the $300 threshold even if 50% of use is less than $300 in that year. I still find my tablet as valuable to my business now as I did years ago so I cannot say it has depreciated in value at all. It is as fast as always and does everything I need.

SO ... my opinion is I need to just ignore this business expense... any opinions from people who know tax?

Most helpful response

ATO Community Support

Replies 3

Hi @treefairy,

 

It looks like you've overcomplicated it for yourself! Let's break it down.

 

The $300 immediate deduction limit you're referring to is for non-business assets. That means non-business income related deductions - employees claiming deductions, that sort of thing.

 

The depreciating assets for small businesses are different! For the instant asset write-off, thresholds change each year. As of 12 March 2020, the threshold is $150,000. For the rest of the 2020 financial year, it was $30,000.

 

Under the instant asset write-off, each asset under the threshold can be, well, instantly written off. This applies to each asset and for the business portion. This includes your tablet.

 

Here's how to declare it in myTax:

  • On page 4: prepare return, scroll to Business/sole trader, partnership and trust income (including loss details)
  • Select Add/Edit

  • Scroll to net non-primary production income or loss or not primary production income or loss (whichever is applicable)

  • Enter the depreciation amount under the label Depreciation expenses – manually calculated

  • Scroll to Other business and professional items

  • Enter it again under Small business entity simplified depreciation – Deduction for certain assets

Devotee

Replies 0

Thank you so much I understand now. It is a shame I cannot itemize my write-offs and title them.
So I have to ask... I also paid for a VPN+Encrytped e-mail pakage with protonmail that year for my business to keep me secure while trading on different exchanges.

I paid for the year subscription in BTC:Bitcoin, which they invoiced me in USD equivalent, and then I converted that USD to AUD the day of the invoice, to get a cost in AUD.

Which section would I put this business expense i.e. Software. Do I NET it with the Tablet (%of use).
I'm unsure in what context it is depreciable, however.

I also bought an office chair from officeworks for my business, and have the box and the eftpos charge on my bank account (the charge was 280 but I know the chair was only 149 of that), but because I unfortunately misplaced the itemized receipt I won't be writing off that expense. I'm sure I put it "somewhere I wouldn't forget", which as we know is the best place to put things if we want to immediately lose them.

Being able to write off part of the cost of the tablet is great, thank you. 

ATO Community Support

Replies 1

Hi @treefairy,

 

Costs relating to, but that are not themselves, instant asset write-offs do not need to be included as a part of the instant asset write-off itself. You can claim for the software as a regular business expense by doing the following:

  • On page 4: prepare return, scroll to Business/sole trader, partnership and trust income (including loss details)
  • Select Add/Edit
  • Scroll to net non-primary production income or loss or not primary production income or loss (whichever is applicable)
  • Add the software under All other expenses – manually calculated.

 

Turns out the receipt is somewhere so safe even you can't find it! I do that frequently with important documents. You can use the myDeductions tool in the ATO app to take photos of your receipts and store the data to upload to myTax next year to help counteract this, though!

 

You may be able use other records types to substantiate your claims if you don't have a receipt. Have a look at what is a record? Keep in mind some businesses can give you a copy of your receipt, especially if you made a purchase using an account you have with them, or if you did any of it online! Smiley Happy

Devotee

Replies 0

Blake you speak my language, I can't tell you how helpful you are, thank you so much.

I usually overshare information in my post... not because I really want to claim that specific office chair, but because I want to improve and do better in future... and you've given me all the information I need to do that.

It is like going to a GP, and they think you want a cure from the information you've given, so they type in their version of wikipedia some of the things you've said, hand you some pills that may or may-not make it worse... and don't bother to inform you of anything. When all people really want sometimes, is to understand what is wrong, like actually going on and are not asking for a cure, as sometimes, just knowing is the best cure.. it builds confidence and sometimes that's all the body needs to fight back -- not uncertainty and more uncertainty added to the mix with random cure-alls or specific drugs meant to hit one mark, so everything else about their interaction in the human body is ignored... as long as it has some desired outcome... and their tolerances are a tiny fraction of a percent means they can market that as effective.

So .. my analogy is, when information is the cure, you are golden ^D^