Short and sweet, is it better to buy outright or finance a car for tax purposes.
Buying a Ute on ABN as a sole trader and getting conflicting opinions.
Finance or outright for new car
robertorodrehgo on 16/11/2019 - 20:08
Comments
Inb4 Camry.
https://www.ato.gov.au/Newsroom/smallbusiness/General/$30,000-instant-asset-write-off/
Buy one under $30k using whatever method you like and write the whole thing off as a deduction instantly.
Have been advised to get purchase price under 30k on paper to claim the most possible. I think that's what your referencing?
Yes, it's an instant 30% back at tax time.
What happens if after the instant asset write off, you get a loss overall? Carry forward for future years or can it offset your salary income?
Under $30k ex GST. So you can buy a car up to $33k to instantly write it off
It's a great deal.
that seems ridiculous…why wud ATO allow instant write-off? Whats the logic there?
https://www.ato.gov.au/Newsroom/smallbusiness/General/$30,000-instant-asset-write-off/
Reduced tax collected by the ATO this FY by allowing the full 30K to be depreciated but increased tax collected in future Financial years since there is no longer a tax write off.
which way came out on top ?
as in 30k VS 35k car
Timing is only one consideration. Can the person buy the Ute again under the scheme n write it off or there might be other things that can be used to write off things potentially.
to stimulate the economy.. it's been in force at various price points for a few years now.
Who cares how much it costs, you can just WRITE IT OFF! ;)
https://www.youtube.com/watch?v=XEL65gywwHQ
Op is a sole trader. Buying high value assets outright may have major impact on their cash flow.
Depends if your cash flow can take the hit on paying outright otherwise finance it to smooth out payments
Whatever BMW Finance says… lol
Though, will you actually use for your work activities?
Protip: driving from home to work and work to home is not a work related travel expense.Though, will you actually use for your work activities?
Why, of cooooourse! ;p
Just put everything on the company card.
If the vehicle is an exempt vehicle, for example a ute, home to work is exempt from fbt and fully deductible.
https://www.ato.gov.au/General/Fringe-benefits-tax-(FBT)/Types-of-fringe-benefits/Car-fringe-benefits/Fringe-benefits-tax—-exempt-motor-vehicles/Though, will you actually use for your work activities?
Protip: driving from home to work and work to home is not a work related travel expense.he's a sole trader. work would be at home wouldn't it? Anywhere else that is work related is a company trip. It was when i was self-employed
If you are a sole trader on ABN working as a tradie, you obviously don't work from home, you travel to the site (or different sites) everyday.
My tax agent said in that situation it is still not considered a company trip and is not tax deductable.
It will only be tax deductable if you travel from one site to another in the same day.
Would love to be corrected but that's what I know.I did all my quotes, office work, etc at home and claimed for utilities and office furniture but not depreciation on the office space as i didn't want the tax hassle when we sold the property.
Not all work can be done onsite. I used to do a lot of QA checks, check assembly, final assembly, "cover your butt rather than embarrass yourself in front of the client" work at home.
The tax office allows you to start claiming travel from home if tools of trade are stored there or the tools are too bulky to be transported by other means or cannot be stored securely onsite when you aren't there.
My tax guy said any site visits were a deduction. That was 2007. YMMV depending on how you go about doing your work.
A tradie could make trip to Bunnings on a Sunday afternoon and call it work related.
Basically just affects your cash flow. If you can do an immediate write off that works. If you do a finance lease you can just deduct the whole monthly payment (assuming business use is 100%) and the GST.
Yes