Income Tax Changes – Small Businesses (2013 General Tax Strategies)

There are significant changes to the timing of deductions for plant & equipment.

Items costing less than $6,500 excluding GST are now immediately deductible (up from $1,000).

Motor vehicles costing $6,500 or more qualify for an upfront deduction of $5,000 + 15% of the remaining amount.

Entrepreneurs Tax Offset Abolished

The Entrepreneurs Tax Offset provided a 25% reduction in income tax for small businesses with annual turnover less than $75,000.

This has been removed from the 2012/13 income year onwards. If you benefited from this tax offset in previous years, you may have an increased tax liability in 2012/13.