Buying a car?

Today I have another good news post for those who are a small business entity (SBE)and thinking about buying a new or used car.

If you fit this criteria then you will be happy to learn that from July 1st 2012 (this financial year we are in now) the first $5,000 of the vehicle will be fully tax deductible.  This is in addition to the accelerated depreciation that you receive as an SBE.  It makes buying a new car pretty attractive tax wise.

If you bought a car that was $10,000 excluding GST the benefit is as follows:

BEFORE 1st July 2012:  $1,500 depreciation deduction

AFTER 1st July 2012:  $5,000 immediate deduction plus $750 depreciation.  Total of $5,750

That’s an additional $4,250 tax deduction.  Not too shabby right?

The vehicle does not have to be brand new and if the car cost less than $6,500 then you can claim the full amount as an outright deduction. The above figures will vary slightly for private use but overall, it’s a great result!


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: