The Small Business Specialists
Phone: 131 BIZ
1 December 2009
Business owners intending to take advantage of extra tax deductions announced in this year’s Federal Budget, will need to do so before the 31 December deadline.
Acting Managing Director of the Small Business Development Corporation, Ms Juliet Gisbourne, says the tax incentives are good for business, provided the goods being purchased are necessary items.
“For those intending to buy business-related equipment or machinery, the tax deduction is a bonus, but it’s important to recognise that it’s not a case of getting things at half price,” Ms Gisbourne said.
“The Federal Government’s 50 per cent tax deduction is not a tax rebate and the true value of the deduction depends on the individual’s marginal tax rate.”
For example, if the cost of the goods purchased is $30,000, the 50 per cent tax deduction would mean you reduce your taxable income by $15,000, saving you the tax on that amount. If your marginal tax rate is 30 per cent, then you would save 30 per cent of $15,000 or $4,500.
Now this is still a sizeable discount, but not as good as the $15,000 you might have imagined at first glance.
The best thing to do if you are considering taking advantage of the Federal Government’s offer is to check with your accountant or contact us for further information. But do so before 31 December 2009.
Media contact: Di Graham (08) 9220 0218 or 0432 750 565.