Applying 2021 changes to depreciation in tax 2023

You're here to find out how to apply the different depreciation incentives in MYOB Tax.

The order of applying the depreciation, if more than one incentive applies:

Based on the rules and thresholds, we've made changes to the depreciation worksheet to help you choose the correct threshold.

Small business using simplified depreciation rules

To apply TFE

If you're an SBE using simplified depreciation rules, you must use TFE if the asset is first used/held on or after 6 October 2020.

- the asset is added to the general small business pool,
- date purchased is on or after 6 October 2020.

There is no threshold limit to apply TFE.

To apply BBI or Instant write off

If you're an SBE using simplified depreciation rules, you can use:

Select Y at the SBE Eligibility tests.
In the depreciation worksheet, the Instant write off (IAWO) method will apply automatically to a pooled asset if the following date and thresholds conditions are met:

Date when the asset was used or installed	Threshold
11 March 2020 and prior	$30,000
12 March 2020 to 5 October 2020	$150,000

To apply TFE

If you're an SBE not using simplified depreciation rules, you can choose to use TFE if the asset is first used/held on or after 6 October 2020.

We've added new fields to choose from under the stimulus method election:

Depending on what code you chose, the methods will differ accordingly.

Stimulus Method election	Methods available
Code N: Not a business asset or category not eligible for TFE/BBI
Code T: Using Temporary Full Expensing

To apply BBI or Instant write off

If an asset is not added to the pool, you may choose Backing Business investment depreciation rules for the asset.

We've added new fields to choose from under the stimulus method election:

Depending on what code you chose, the methods will differ accordingly.

Stimulus Method election

Methods available

Code N: Not a business asset or category not eligible for TFE/BBI

or

Code O: Opt out of BBI

Code B: Using Backing business investment (BBI)

Depreciation table

Business type	Aggregated turnover	Temporary full expensing Assets first held after 6 Oct 2020	Instant asset write-off $30,000 threshold Assets first used till 11 March 2020	Instant asset write-off $150,000 threshold Assets first used from 12 March 2020	Backing business investment Assets first used from 12 March 2020
Small business (SBE)	Less than $10m
Small business (not an SBE)	Less than $10m
Medium business	$10m to less than $50m
Medium to large business	$50m to less than $500m
Large business	$500m to less than $5bn or using Alternative income test

Date when the asset was used or installed	Depreciation rate
12 March 2020 to 30 June 2020	30%
01 July 2020 to 5 October 2020	57.5%