Work-related computer expenses
You can claim a deduction for the work-related portion of:
Expenditure incurred in acquiring computer software forms part of the cost of the unit of computer software acquired. The general rules for depreciating assets apply to these units of computer software. The decline in value is worked out using the prime cost method and an effective life of four years.
You can claim an immediate deduction for the full cost of tools and equipment bought on, or after, 1 July 2001 if:
- the cost of a particular item does not exceed $300, and
- you use the item predominantly for the purpose of producing assessable income that is not income from carrying on a business
- the item is not part of a set that you start to hold in that income year, where the total cost of the set exceeds $300
- the total cost of the item and any other identical or substantially identical item that you start to hold in that income year does not exceed $300.
If you do not meet all of the conditions listed above, you cannot claim an immediate deduction for the full cost of your tools and equipment.
However, you can claim a deduction for the decline in value of the tools and equipment you use for work based on their effective life.
You can claim a deduction for the decline in value of tools and equipment you use for work. Tools and equipment are depreciating assets; a depreciating asset is an asset that has a limited effective life and can reasonably be expected to decline in value over the time it is held for use.
To calculate a claim for decline in value, refer to Work-related expenses - decline in value.
You can claim a deduction for the cost of repairing tools and equipment.
If you use tools and equipment partly for work and partly for private purposes, you can only claim a proportion of the cost of repairs and a proportion of their decline in value. For example, if you use your sewing machine 80% of the time for work and 20% for sewing for your family, then you can only claim a deduction for 80% of the cost of repairs and 80% of the decline in value of the machine.
For more information about calculating a deduction for decline in value, refer to Work-related expenses - decline in value or the more comprehensive Guide to depreciating assets.
If you need help applying this information to your own situation, phone us on 13 28 61.
Last Modified: Wednesday, 20 February 2013