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Tools and Equipment Deductions In 2024

Claiming a tax deduction for the cost of purchasing tools and equipment for last financial year? Make sure you know the rules around what can be an immediate deduction and what you have to depreciate over a number of years. When tools and equipment are used for both business and personal reasons you must apportion the claim for the business purposes only. 

 

Example: You purchase a new electric drill and use it for work and at home you simply adjust your claim to reflect how much you use the drill for work related purposes, and how much it is used for private purposes.

 

Tools and equipment costing more than $300 cannot be claimed as an immediate deduction and will need to be claimed over the assets effective life (this is known as depreciation).

 

Contact us today to assist you with claiming all the deductions you’re entitled to!

Criteria Of Tools And Equipment

You can claim the cost of any tools or equipment as a tax deduction:

  • If the tools and equipment contributed to you earning assessable income during the financial year

  • If you can demonstrate that they are used for the work purposes, rather than mostly private use

  • Items that cost less than $300, you can claim an immediate deduction for the total cost

  • Items that cost more than $300 (or that are part of a set that together cost more than $300 in total), you must depreciate them over their effective life (depreciation)

  • For repairs and insurance costs related to tools and equipment

  • For upgrades to tools and equipment

What Is Classed As Tools And Equipment?

There are a number of standard items that can be classed as tools and equipment and can be claimed as an immediate deduction or depreciated over its effective life, including:

  • Computers, software and calculators

  • Desks, chairs and lamps

  • Filing cabinets and bookshelves

  • Hand tools and power tools

  • Protective items (hard hats or safety glasses)

  • Professional libraries

  • Safety equipment

  • Technical instruments

What Can't I Claim As Tools And Equipment?

You cannot claim a tax deduction if:

  • Any tools or equipment are not required to earn assessable income

  • The full cost of any tools or equipment that are also used for private purposes. You must apportion and substantiate your claim for personal use and this is not a tax deduction.

Speak to a Tax Specialist to ensure you are claiming all the tool and equipment deductions you are entitled to!

LAST UPDATED 25/12/2023

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