-this article updated 30 Jan 2012, all links now work and should point to up to date information-
It’s end of financial year again, and we have a lot of savvy customers rolling in to buy laptops. Why?
1. Education Tax Rebate. If you have Secondary School aged kids, you can claim up to 50% of the education expenses for each child. This year the limit is $1558 (or $390 for Primary School aged kids). This could mean that if you buy a $1500 laptop for little Johnny (or Kevin), you can claim $750 back from big Kevin. So you might as well buy the bag for $58 and claim the maximum. More info (site no longer available)
2. You can claim the purchase of a laptop under ‘miscellaneous work related expenses’ This includes software. More info here. Here’s where it becomes murky. I have been told by several people that you can depreciate a laptop at 100% per year, meaning you can buy a new one every year and deduct it from your tax bill. I’ve since found out that this applies only if you have some sort of justification for needing a new machine every year- like you work in IT (yay for me!) Everyone else will have to depreciate according to the standard schedules available to them. This assumes that it is a 100% work related expense.
3. You can salary sacrifice to buy the laptop. The tax rules say that certain devices (including mobile phones and laptops) do not attract FBT. If you work for a company, you can get the company to buy the laptop, they claim back the GST as an input tax credit and take the repayments out of you pre tax income. So you get to pay the ex gst price for the laptop, and get a tax benefit because you pay for it out of your gross wages, reducing your tax. But it doesn’t end there. It’s an outright deductible for the company because they purchased it.
The usual caveats apply- I’m not an accountant- please seek professional advice before taking my word for anything in this article.
Use of either of these favourable rulings could get more technology into your house more often. That’s a good thing, right?