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Website Tax Deduction: Instant Asset Write-Off

Claim your website as a tax deduction with Instant Asset Write-Off.

Since July 2015, Australian tax laws changed regarding small business and the ability to claim an instant tax deduction for each capital item purchased. Prior to this, most assets were depreciated over 4 or 5 years.

From 12 March 2020 until 30 June 2020, the instant asset write-off threshold amount for each asset is $150,000 (up from $30,000). The eligibility has also been expanded to cover businesses with an aggregated turnover of less than $500 million (up from $50 million).

Before we look further into the Government’s Instant Asset Write-Off for the 2019-2020 financial year, let’s look at the criteria:

Who is eligible for the Instant Asset Write-Off?

To be eligible, you must:

  • have a business with an aggregated turnover of less than $500 million

Assets must:

  • cost less than the instant asset write-off threshold
  • be purchased and used in the year the write-off is claimed

Claiming deductions for expenses associated with a website requires an analysis of the costs and circumstances.

Website costs can be broadly classified as either capital expenses, or ongoing running costs. If a business is new, website expenses incurred before the business starts may be included for deduction.

Running Costs

You can already claim Running Costs in full. Ongoing running costs are usually recurring and readily identified as operating costs.

They include such expenses as:

  • Domain Name Registrations
  • Web Hosting
  • Email Hosting
  • Website Maintenance Plans / Packages
  • Technical Maintenance

Capital Costs

Captial Costs can be confusing. To qualify for an Instant Asset Write-Off in the year of incurring the expense, these costs must be major in their nature. Generally, there are three possible types of capital expense:

  • Website setup costs incurred before a business starts
  • In-house web development costs
  • Other capital costs

Be sure to talk to your accountant about your tax deduction, especially about in-house development. To write it off instantly, it has to be complex and add significant improvements to your business. Aspects such as requiring significant planning, custom features, eCommerce, membership or secure access portals. For more information on claiming website costs as a tax deduction, and for more information on the Instant Asset Write-Off, head to the ATO website.

If you’re looking to launch a website for your business and want to reduce the overall cost, this is one way to make it happen. Take advantage of the instant asset write-off alongside our massive discounts on web development and marketing services during COVID-19 and let’s grow your business. Enquire online today and a team member will be in touch to discuss your goals.

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