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  • #987739
    rthorntn
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    Hi,

    I started the company last July and since then I have purchased a laptop and a phone to use, the business had no real money so I used my personal cash to pay for both items, what is the approved way to put this through the business?

    I also have an employee who I have given a 3 year old laptop of mine to use, what is the best way to put this through the business?

    Thanks for looking.

    Best regards
    Richard

    #1164141
    rthorntn
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    Anyone, I assumed lots of people would have done this when starting up?

    #1164142
    Past-Member
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    If you purchased something for value of $1100 including GST and less, it becomes an immediate deduction but you would have to do a percentage of that for your personal use. Say it was 20% personal versus 80% business, then 80% of the value would be deductible.

    Having said that, you can’t make deductions against something you haven’t earned enough from. The ATO currently says that a business has to be turning over $20K in order to deduct any expenses. (Otherwise they can think it’s a hobby.)

    So, just keep a clear record of your purchases to hold over for future year deduction if applicable.

    Your accountant should be able to advise you on this, but also read through all the info at the ATO https://www.ato.gov.au/Business/Your-business/

    Cheers.

    PS Depends also on your business structure e.g. solo, company etc. as to how to transfer the money to the business. Please discuss with accountant, bookkeeper or the ATO as above.

    #1164143
    rthorntn
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    Thanks everyone!

    I’m just thinking I might need to add a bit more clarity to my question.

    I think my title should have been “how to account for a business laptop paid for with my own personal money”

    My business has made over $20K, I work on it full time and have no other jobs, I had an employee for 2 months also.

    I think I will just add the Apple Macbook invoice to Xero and use my dummy “Directors Loan” bank account to “virtually” loan the business money to “pay” the invoice.

    I guess my question was more along the lines of does the apple invoice for $1850 need to have my business name on it, it has my business email. I was not GST registered when I bought it so I won’t be claiming that?

    Are there any caveats I should be aware of with the laptop being under the business?

    Best regards
    Richard

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