Friday, 9 August 2013

Tax tips, part 8: low-value pool deduction

As I discussed earlier in the week, when you use assets such as tools and equipment or professional libraries in the course of producing income, you are able to claim an immediate deduction for any item that cost $300 or less, or a deduction for the decline in value of an item over its effective life.  One way to claim your deduction for the decline in value of low-cost and low-value assets is by allocating them to what is called a low-value pool.  This is reported in section D6 of your tax return.

What you can claim

A low-value pool can include:
  • Low-cost assets – depreciating assets that cost less than $1,000
  • Low-value assets – depreciating assets that are not low-cost assets but which, at the start of the tax year, had been written off to less than $1,000 under the diminishing value method