$20,000 instant asset write-off extended: what to keep in mind
Around this time of year, our clients will often ask us: “Should we be buying equipment before 30 June?”
With the $20,000 instant asset write-off extended to 30 June 2026, there’s still an opportunity, but in practice, it only works when the decision makes sense beyond tax.
What’s available
If your business turnover is under $10 million, you may be able to:
- Immediately deduct assets under $20,000
- Apply the limit per asset (not in total)
- Claim on both new and second-hand assets
- Use it for assets first used or installed by 30 June 2026
Where we see the biggest impact
This works best when it aligns with what the business already needs.
In practice, that usually means:
- You were planning to purchase the asset anyway
- It’s a stronger income year
- Cash flow can support the spend
A common example
We often see clients bring forward smaller equipment purchases they already need – tools, trailers, IT upgrades – and claim the deduction in the current year.
The result:
- Immediate tax relief
- Improved efficiency in the business
Where it can fall over
A common issue is buying for the deduction, not the outcome.
We see this when:
- Purchases are rushed in June
- Equipment isn’t fully used
- Cash flow gets tighter after the spend
The reality is simple: spending $20,000 to save tax still means you’ve spent $20,000.
Timing makes the difference
Like most strategies, this works best when it’s planned. We often see better outcomes when clients:
- Review their position earlier (April–May)
- Have a clear view of expected profit
- Make decisions with time to weigh them up
Shifting from reactive decision making in June to planning ahead is where the real value sits.
What this means for you
Before making a decision, it’s worth asking:
- Do we actually need this asset now?
- How does this impact our cash flow?
- What does our tax position look like this year?
The instant asset write-off can be a useful tool, but only when it’s part of a bigger picture.
If you’re heading toward year-end and haven’t reviewed your position yet, now is a good time to start.
A short conversation can often bring clarity early, helping you move forward with more confidence, without the June pressure. To get in touch with an accountant in your local area, click here: www.advisorypartner.com.au/contact/