Instant asset write-off
Immediately deduct an eligible asset instead of depreciating it.
The instant asset write-off lets eligible small businesses claim the full cost of a qualifying asset in the year they start using it, instead of depreciating it over years. It brings the whole deduction forward, which lowers that year’s taxable income. The cost threshold and eligibility are set by the government and can change each year.
The threshold applies per asset rather than as a yearly total, and the test is the cost of the asset itself. Because the figure and the eligibility rules are set in each Budget and have moved repeatedly, check the current threshold with the ATO before relying on it — this entry deliberately does not name one, since a stale number here would be worse than none.
Worked example
Two businesses each buy a qualifying $4,000 machine. One writes it off immediately and reduces this year’s taxable income by $4,000. The other depreciates it over four years at $1,000 a year. Both eventually deduct $4,000 — the write-off changes WHEN the deduction lands, not how much of it you get.
Common mistake
Buying something in June purely to claim it. The deduction is worth your marginal rate on the cost, not the cost — spending $4,000 to save perhaps $1,300 only makes sense if the asset was needed anyway. The write-off is good timing on a purchase you were making, not a reason to make one.
Grounded in ATO guidance. Figures last checked . General information, not tax advice.
Related terms
Depreciation (decline in value)
Claiming the cost of a big asset gradually over its life.
Effective life
How many years an asset is expected to be used — the base of every depreciation rate.
Sole trader
The simplest business structure — you and the business are one.
Logbook method (car expenses)
Claim your car’s real business-use share of running costs.
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