Maximise tax deductions in your medical practice through instant asset write-off
As announced in the Federal Budget the government is in the process of introducing new legislation which may assist many medical practices. With long lead times on acquiring medical equipment, now is the time to start preparing your capital spending budget for the year while keeping in mind how you can enhance your year end tax position.
For example, if a practice spends $19,000 for an Ultrasound Machine and $8,000 for an ECG With Spirometry, a tax saving of up to $12,690 may be possible depending on the relevant structure and tax rates.
The instant asset write-off can support your practice by improving your cash flow and the health of your business. Eligible businesses can claim an immediate deduction for a business asset in the year it is first used or installed ready for use for a taxable purpose.
Your practice will be eligible for the asset write-off for a purchase up to $20,000 per asset where aggregated turnover is less than $10 million. Assets valued at more than $20,000 can continue to be placed into the small business depreciation pool and be depreciated at 15% in the first year and 30% in subsequent financial years.
The structure of financing needs to be carefully considered as the form of financing affects who obtains the benefit. For example, it generally does not apply to assets the practice leases but an asset financed with a chattel mortgage would qualify.
In many cases, the practice can claim the cost of new and second-hand assets acquired and used, or installed for use, before 30 June 2024. Timing is critical. Supply chain issues may require you to order new equipment now to have it in use before the 30 June 2024 deadline.
To confirm your eligibility and to discuss our tax health check service reach out to our team of business and tax advisors before it’s too late. You may be paying too much tax, not maximising your cash position, or taking on unnecessary risk.
The views and opinions expressed in this article are those of the author/s and do not necessarily reflect the thought or position of Findex.
This document contains general information and is also not intended to constitute legal or taxation advice. If you need legal or taxation advice, we recommend you speak to a qualified adviser.