Claiming your bonus deduction for technology investment this year

A bonus deduction may be available in this upcoming tax return for expenses relating to undertaking a digital adoption for your business.

This bonus deduction is 20% of the costs you’ve incurred to support a digital adoption, including but not limited to:

Digital enabling items such as computer hardware and software, systems and services that form and facilitate the use of a computer network.

Digital media and marketing such as audio and visual content that can be created, accessed, stored and viewed on digital services, and

e-commerce items that support digital payment systems and online transactions.

The bonus deduction is capped at $20,000 per year, being 20% of $100,000 in costs. This bonus deduction is on top of the actual deduction that you’ll be able to claim for the items used in your business. The actual deduction may be an outright tax deduction due to the temporary full expensing rules that are currently in place.

Any eligible costs incurred from 7:30pm (AEDT) on 29 March 2022 to 30 June 2023 are included.

In June 2023, this measure became law. With 30 June 2023 fast approaching, you have one last opportunity to obtain an upgraded piece of equipment for your business which will give you that 20% bonus deduction.

Even though this leaves you with just a small amount of time to get a new asset, we have previously mentioned to you that the bonus deduction was likely to become law as the initial announcement was first made by the former Coalition government. It was then confirmed to be re-introduced as law by the current Labor government back in August 2022.

What you need to do

We will need to scrutinise your deductions for all digital upgrades over the past 15 months to ensure that we are getting the full bonus deduction to you. When you send in your year-end tax work and accounting file, make sure you attach all the invoices that you think will be eligible for this bonus deduction. To begin with, that would include all your new purchases listed within the 3 items above.

Along with this, we will also review your files and make sure that we see a copy of any invoices that we think are also eligible for the bonus deduction.

If you have any questions, please contact our office. We would be delighted to assist you further.


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