For the tax experts - depreciating a Laptops

[ndru]

Martin

I stand corrected!

http://law.ato.gov.au/atolaw/view.ht...D2004559/00001

If you're in the higher marginal tax bracket its almost a free laptop over 3 years, although the Government's new tax brackets will reduce the scheme's to those in the 65K to 125K group.

[kiwigeo]

Martin

I stand corrected!

http://law.ato.gov.au/atolaw/view.ht...D2004559/00001

If you're in the higher marginal tax bracket its almost a free laptop over 3 years, although the Government's new tax brackets will reduce the scheme's to those in the 65K to 125K group.

Much cheaper than buying a laptop with post tax dollars. And IF (big IF!) one can depreciate the machine for business use then even more savings.

[ndru]

Much cheaper than buying a laptop with post tax dollars. And IF (big IF!) one can depreciate the machine for business use then even more savings.

And if you're on 48.5% marginal tax (incl Medicare) then you almost get it for free after three years. I'm thumbing through the Dell catalogue right now!

I wonder what happens if you're paying child support - does it get adjusted and for your sacrifice? If so, the Government would effectively be paying you for a new laptop!

[kiwigeo]

And if you're on 48.5% marginal tax (incl Medicare) then you almost get it for free after three years. I'm thumbing through the Dell catalogue right now!

I wonder what happens if you're paying child support - does it get adjusted and for your sacrifice? If so, the Government would effectively be paying you for a new laptop!

Child support is calculated on PRE tax earnings isnt it? Salary sacrificing wouldnt really help a person in that situation.

[ozwinner]

( read a nearly impossible smilie here)

Peter.

Here ya go Peter.

Al

[Sturdee]

Nineteen times the same post, you must be certain of that fact.

Peter.

[ozwinner]

Child support is calculated on PRE tax earnings isnt it? Salary sacrificing wouldnt really help a person in that situation.

X19
A new world record........
Well done.

Al

[ozwinner]

Beat me by the skin on me teeth Peter.


Al

[Wayne Davy]

Ok, I am not a Tax Expert BUT I have salary sacrificed a couple of Laptops as well as two PDA's (Organisers - Pocket PC/Palm/etc.). Now, it is Ok to depreciate the laptop/pda if it is used for work. This has been verified by four separate Accountants used by guys I work with.

The amount that can be depreciated depends on the work usage - in yours case (and mine) its 100% of the cost. Now this is the interesting bit, the cost. Most would think it your out-of-pocket cost (ie after the tax saving). Which, on a $3000 laptop where you are on the top marginal tax rate (inc Medicare), would be $1,272!

Well, nope, it's actually on the Invoice cost (less GST), so the Depreciable Value for the above is $2,272. You can depeciate it over 3yrs so the bottom line is you are actually PAID $50 by the ATO to own the laptop after 3 years!!

SIMPLE Calculation samples:

Salary Sacrifice + Depreciation
Marginal Tax Rate	48.5%	43.5%	31.5%
Laptop Cost	$3,000	$3,000	$3,000
Less GST	$273	$273	$273
Depreciable Value	$2,727	$2,727	$2,727
Less Tax Saving based on Marginal Rate	$1,455	$1,305	$945
Effective Cost	$1,272	$1,422	$1,782
Yr 1 Depreciation @ 33.3%	$440	$395	$286
Effective Cost after Year 1	$832	$1,027	$1,496
Yr 2 Depreciation @ 33.3%	$440	$395	$286
Effective Cost after Year 2	$391	$632	$1,210
Yr 3 Depreciation @ 33.3%	$440	$395	$286
Effective Cost after Year 3	-$49	$237	$924
NOTE: I am not a Tax Expert and you should consult your Accountant to verify the above figures given your personal circumstances.

Another little point, salary sacrifice comes under the FTB rulings and the FTB Year runs from 1st April to 30 March NOT the Tax year.

Another sample from the Net
http://www.laptopshop.com.au/Website...CategoryID=996

[kiwigeo]

Hi Wayne...thanks for the info.

Yes I am aware that the FBT year isnt same as tax year. You sort of expect this sort of thing with the screwed up tax system in this country.

Am currently cursing the day my accountant talked me into running a self managed super fund. Im basically an unpaid employee of the ATO for at least 8 days of the month.

[Wayne Davy]

I'm thumbing through the Dell catalogue right now!

Mate,

If you are after a desktop replacement laptop - check out the HP ZD8000 range. The ZD8004 model is going for around the $3000 mark including bonus external Digital TV Tuner. Now these are HUGE and have 17" Ultra Bright screens with full P4 3.2G processors so they are Heavy and battery life is not great (1.5 hours max). However, they are very, very powerful laptops (term used lightly) and the screen is mind blowing. I Salary Sacrificed one last month and love it.

Basic spec is:
HP Pavilion zd8004AP
Microsoft® Windows® XP Professional
Intel® Pentium® 4 Processor 640 (#) with Hyper-Threading Technology (3.2GHz, 2MB L2 cache, 800MHz FSB)
17.0" colour TFT WXGA+ (1440 x 900) wide viewing angle, BrightView 16:10 Widescreen
512MB (2 x 256MB) DDR2 SDRAM (400MHz)
80GB (5400 rpm)
Dual Layer DVD±RW/±R
ATI Mobility Radeon X600 PCI-Express X16 Graphics (128MB DDR SDRAM)
Wifi B/G
Memory Card Reader
FULL size Keyboard (includes Keypad!!!)
Plus more

Check out the full specs here:
http://h50025.www5.hp.com/hpcom/au_e...8_PV299PA.html

Gloat piccy (Coke can is for scale and the camera flash spoiled the look of the screen):

[Wayne Davy]

Kiwi,

No worries just check with your accountant (one of the ones that outlined the same scenario I guess).

My accountant did not believe this either at first but I insisted she check it out. She did with a Senior Accountant at the firm and they verified it.

[ozwinner]

Am currently cursing the day my accountant talked me into running a self managed super fund. Im basically an unpaid employee of the ATO for at least 8 days of the month.

Why is that??
Fill us in.

Al :confused:

[Jack E]

If you are after a desktop replacement laptop - check out the HP ZD8000 range. The ZD8004 model is going for around the $3000 mark including bonus external Digital TV Tuner.

Nice computer Wayne.
Is it hard to justify the 100% work usage with an external Digital TV Tuner in the package?

Cheers, Jack.

[kiwigeo]

Why is that??
Fill us in.

Al :confused:

Al, its called "tax complicance"....in layman's terms it means spending hours on tax related paperwork. The tax regulations are complex and convoluted and the bottom line is as a trustee of a SMSF youre required to know the regulations and ensure that your fund is compying with same. Most SMSF trustees have an accountant handling the administration of the fund but if the accountant's knowledge of the regulations has a few gaps then you as a trustee end up taking the rap if the ATO decides to do an audit.

On the positive side Im doing alot better than most managed super funds but it comes at a cost...alot of time spent making sure my fund is compliant with ATO regulations. The SMSF has been running for 2 years now and the jury is still out as to whether or not taking the SMSF path was a good decision.