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Drone Advice

Thumbnail for Claiming a $20,000 asset write-off for your farming business

Claiming a $20,000 asset write-off for your farming business

Many of Fly The Farm’s customers have already taken advantage of the government’s instant asset tax write off scheme to introduce drone technology to their farm.  As part of the Small Business Instant Asset Write-Off scheme, farming businesses can immediately deduct the cost of eligible assets, including those used in farming operations from their investment. 

Here's what you should know:

  • Eligibility: Your farming business needs to qualify as a small business for tax purposes, which typically means having an aggregated turnover of less than $10 million per year.
  • Eligible Assets: The $20,000 threshold applies to individual assets, whether new or second-hand, that are used in your farming business.
  • Timing: The $20,000 threshold scheme is scheduled to end at the end of the 2025 financial year. 
  • Immediate Deduction: Rather than depreciating the asset over time, you can claim the entire cost of the asset in the financial year you purchased it, up to the threshold amount.
  • Claim Process: When lodging your tax return, you can claim the instant asset write-off through your depreciation schedule or directly in the relevant section of your tax return form.
  • Records and Documentation: Keep thorough records of the assets you purchase, their costs, and how they are used in your farming business. This documentation will be necessary to support your claim in case of an audit.

Assets valued at $20,000 or more that are ineligible for immediate deduction can be placed into the small business simplified depreciation pool. Within this system, such assets are depreciated at a rate of 15% in the first income year and then at 30% each subsequent income year.

Always keep in mind that tax laws and regulations can change, so it's crucial to stay updated. While the instant asset write-off can provide significant tax benefits for your farming business, it's essential to consult with a tax professional or accountant who understands the specifics of your business and the tax laws in Australia click here for more information on the scheme.

 

Posted in Drone Advice at 27 May 24

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