To calculate your depreciation deduction for most assets you apply the general depreciation rules (unless you're eligible to use instant asset write-off or simplified depreciation for small business). You can generally use either the prime cost method or the diminishing value method to determine the asset's effective life.
Instant asset write-off
Eligible businesses can:
Immediately write off the cost of each asset that costs less than the threshold.
Claim a tax deduction for the business portion of the purchase cost in the year the asset is first used or installed ready for use.
Instant asset write-off can be used for both new and second-hand assets. Some exclusions and limits apply.
Simplified depreciation rules for small businesses include:
An instant asset write-off for assets that cost less than the relevant threshold.
A general small business pool for assets that cost the same or more than the relevant threshold, which has simplified calculations to work out the depreciation deduction.
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