Startup professional expenditure: as of 1/7/2015, SME’s with income at less than $2m per annum will be able to deduct the full amount of professional fees for starting a business, which includes both Legal and accounting advice. This is a big improvement on the previous rules requiring businesses to amortize these startup expense over a five year period.
$20,000 asset Write-off: As of 12/05/2015 through to 30/06/2017, small business (with turnover less than $2m per annum) have access to the immediate write-off of assets valued at less than $20,000. Assets in excess of $20,000 can be pooled together and allowed a 15% depreciation rate for the first year, 30% there-after.
Where the low value pool of assets reduces to less than $20,000 during the period above, an amount of up to $20,000 can be applied as a write off.
SME Reduced tax rates: As of 01/07/2015, the SME tax rate will be reduced to 28.5%, but note also that the franking credit distribution rate will remain at 30%. The SME companies retaining cash reserves will see this as a benefit, but those family owned companies distributing all profits should also be aware of the personal income tax brackets, and need to find a balance between distribution and their own personal tax circumstances.
Give me a call if you wanted to discuss your company distributions further – Mobile: 0428250906
Individuals taxpayers whose income is derived from unincorporated small businesses, (such as sole traders, trusts and partnerships), will get a 5% discount on tax payable, so long as their income is less than $2m. This discount will be capped at $1,000 per individual, per income year; and applied as a tax offset.
For several other changes, including the effect on individuals, motor vehicle, FIFO, low income, and age pensioners, please see my FB page:www.facebook.com/oneillbusinessservices