Is your startup taking advantage of the $20,000 tax break?
As we get closer to the end of another financial year – and it has come around way too soon – startup founders should begin to make sure that they are on top of all elements of their business, in particular the financials.
Another thing that startups should be aware of is that this is the first full year where Australian companies can take advantage of the $20,000 Small Business Package.
While the headline seems fantastic, many small business owners often approach these types of financial advantages with a sense of caution – after all, red tape is common place in the startup and small business worlds.
That is why Dell has partnered with Startup Daily to break down some of the finer points of the package and pinpoint what you can and can’t take advantage of as we near the end of the financial year.
If you are an Australian startup and your revenue is less than $2 million a year, you are able to claim deductions for an unlimited number of sub-$20,000 purchases made before June 30.
Essentially, you can buy anything that you are using to run your company. That includes software, cafe equipment, printers, photocopiers, tools and equipment needed for specific jobs, security cameras or other equipment, heating and cooling systems for the office, and computing and tech equipment, to name a handful.
Basically, as long as it is under $20,000 and is used in your business, you can buy it. If it is more than $20,000 however it will not get an immediate write-off.
However, in any situation where a purchase is more than $20,000, it can still be written off over a longer period.
Don’t try and be cheeky though! For example, if your startup creates its own in-house software, that is not eligible. Always double check things with your accountant.
We always recommend that before spending any money in your business you talk it through with your account and financial advisors. Many startups are not cash flow positive in their first year and often get into trouble if they spend before planning.
Sit down with a professional and work out exactly what purchases you need to make to help grow your business.
When it comes to taking advantage of any tax breaks or small business packages that may be available to them, it is important that startup founders listen to the tips given to them by the individuals advising them.
What is equally important is that they actually ask their accountant about things like tax break eligibility.
Startups often get so involved in the motion of completing tasks quickly that they can forget that it’s worth spending a little time on pause so they can understand the financials.
The answer to the question of when you should buy that new laptop you need for that new employee you intend to hire will always be in the numbers.
This content was bought to you by our partners at DELL. Check out and take advantage of some of their amazing end of financial year deals on laptops, desktops and servers.