Claim Tax On Website & Apps with $20,000 Instant Asset Write-Off

June 8, 2018

Looking to re-design your website? Perhaps your company is looking to launch a new app?

If so, you may be pleased to hear of the ATO‘s $20,00 instant asset write-off.

This tax time, small businesses with a turnover of less than $10 million can write off assets costing up to $20,000 each in their 2016-17 return. All simplified depreciation rules will apply to assets when choosing this method.

We have identified some tax agents have under-claimed by not applying all the simplified depreciation rules. To use simplified depreciation rules correctly you must:

  • write off eligible assets costing less than $20,000 each
  • pool most other depreciating assets that cost $20,000 or more
  • write off the small business pool balance if it is less than $20,000 at the end of an income year
  • only claim a deduction for the portion of the asset used for business or other taxable uses.

Website / App Running Costs

Ongoing running costs are usually recurring and readily identified as operating costs.

They include such expenses as:

  • Domain name
  • Hosting services
  • Ongoing content¬† and technical maintenance including ad-hoc and maintenance plans

Website / App Capital Costs

Capital expenses will generally be deductible by installments over more than one tax year (i.e. as depreciation).

The amount claimable in each year will depend on the nature of the cost, and when it is incurred.

Generally, there are three possible types of capital expense:

  • Website setup costs incurred before a business starts
  • In-house development costs
  • Other capital costs

For more information head to the Australian Tax Office website.

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