Home – New › Forums › Money matters › $20,000 Tax write off… Example

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  • June 26, 2017 at 2:10 am #996765
    Chippy rain
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    Hi,
    I’m sorry to post about this topic again but I’m still struggling to get my head around this with my limited knowledge of finances etc…

    I’m just trying to get an understanding of whether I should rush out before end of June and purchase tools, office equipment etc and whether I would actually benefit from this write off.

    First off, when everyone says tax write off, what is a write off exactly and how does that actually effect me. Say my income is $20,000. The tax threshold is like $16,000. So that leaves me with $4,000 which I need to pay tax on. So say I go out and buy a PC for my business for $2,500. Does this mean I only have to pay tax on $4,000 – pc$2,500 = $1,500

    So my taxable income is now only $1,500?
    Is that how it works?

    So say I didn’t even make the tax threshold of $16,000. Then any write offs would be useless effectivly because I earned so little?

    Hope it makes sense.
    Appreciate any feedback
    Thanks

    June 26, 2017 at 10:10 am #1208953
    Dave Gillen – Former FS Concierge
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    Chippy rain, post: 248992, member: 61345 wrote:
    So my taxable income is now only $1,500?
    Is that how it works?

    So say I didn’t even make the tax threshold of $16,000. Then any write offs would be useless effectivly because I earned so little?

    Yes I think you have that right on both counts. Hopefully an accountant will drop in to confirm or correct us. :)

    Dave

    Dave Gillen | LinkedIn
    June 28, 2017 at 11:33 am #1208954
    James Millar
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    As fonzie would say…correctamundo.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    June 28, 2017 at 10:33 pm #1208955
    Precise Tax Solutions
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    The $20k immediate asset write-off has also been extended to 30 June 2018, so other than a timing difference in the year in which you claim, there’s no need to rush into anything.

    Cheers

    June 29, 2017 at 10:05 pm #1208956
    businessguru
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    Correct but you missed one little detail. You need to find $2,500 for the PC? Hopefully you need the PC!

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