Note - Covid 19 $5000 Low Value Asset Write-off Threshold Ends 16th March
The 12 month Inland Revenue Covid 19 assistance of being able to expense any asset purchase below $5000 is coming to an end. This option ends on the 16th of March 2021. This was a one-time/year deal.
If you are thinking about buying an asset for your company or sole trader organisation then it may be worth getting your purchase in before this date so that it can be immediately expensed rather than held as an asset and depreciated over a number of years. Thereby reducing this year's income tax.
I.e. New Asset $4500 - claim GST of $586.96, Net Asset Expensed $3913.04 = Reduction of Income Tax at the company rate of 28% =$1095.65
From the 17th of March the new rate of $1000 applies to the low-value asset write-off threshold.
But remember this only works out financially if it was actually an asset that you needed to buy in the coming months. I can't tell you the number of times I have heard of people spending money on things they did not really need in order to reduce their tax. It is a misunderstanding that is all too common.
Today’s Mind-Bender is the Last of the Year! Can You Guess It Before Everyone Else? 🌟🎁🌲
I dance in the sky with green and gold, a spectacle few are lucky to behold; I’m best seen in the south, a celestial sight—what am I, lighting up the New Zealand night?
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Poll: Is it ok to regift something that you have been given?
🎁 Holiday Gift Chat!
Do you ever regift?
What’s your take on asking for a receipt if a gift doesn’t fit?
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79.3% Yes! It's better to regift what I don't need
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20.7% No. It's the thought and effort that matters
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