Item P10 - Small business entity simplified depreciation

See Item P10 - Small business entity simplified depreciation on the ATO website. You may then need to expand the list in the left hand panel, and click the link to P10.

Item P10 is ONLY for small business entities using the simplified depreciation rules.

Small business entities can claim an immediate deduction for assets they start to use, or have installed ready for use, for a taxable purpose, provided each depreciable asset costs less than $20,000. This temporarily replaces the previous instant asset write-off threshold of $1,000.

This measure applies to expenditure incurred from 7.30pm (AEST) 12 May 2015 until 30 June 2018.

Is the taxpayer a Small Business Entity?

This question is to be completed at item 15 each year so that the taxpayer’s eligibility to use the simplified depreciation rules is reviewed each year. Refer to Small business entities election.

To use the simplified depreciation rules, the taxpayer must be a small business. Each year the taxpayer must review their eligibility to continue using the simplified depreciation rules.

From 1 July, 2016 aggregated turnover for small business has been increased from $2 million to $10 million and for the SBITO $5 million with an increase in the percentage applied to SBI for offset purposes, up from 5% to 8% capped at $1,000.

The instant asset write off amount of $20,000 has been extended until 30 June 2018.

Use the depreciation worksheet (d) to manage the depreciating assets and create and manage the small business pool or pools and details will integrate to the return. Refer to Depreciation worksheet (d).

CCH References

7-050 Small business entities

7-250 Simplified depreciation for small business

17-325 Small business simplified depreciation rules