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Laptop Purchase

Discussion in 'Accounting, Tax & Legal' started by Jayar, 28th Sep, 2005.

  1. Jayar

    Jayar Well-Known Member

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    Hello,
    Having previously borrowed to buy an IP, I have some spare $$ left in my LOC and am thinking of buying a laptop. This will be wholly for the purpose of recording all my IP transactions, on-line banking, spreadsheets......everything that pertains to my IP finances......nothing else.
    Can anyone advise me if I can claim depreciation on this item, and if so, give me any further helpful advice?
    Thank you
    Jayar
     
  2. MrDarcy

    MrDarcy Well-Known Member

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    I have for the last few years, so I hope it's allowed :p

    I also had mine supplied as part of salary package, effectively double deducation.
     
  3. Glebe

    Glebe Well-Known Member

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    Yeah I think it can be depreciated over 3 years, but if you salary sacrifice it there is no fringe benefits tax pertaining to notebook purchases.
     
  4. Jayar

    Jayar Well-Known Member

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    Hello,
    Thank you for your replies. I don't think salary sacrifice would be my go, but depreciating it sounds good. I may be over-simplifying this question, but if I depreciate it over 3 years, and it initially costs me ,say, $3000, what would be my nett cost after 3 years?
    Or would I be much worse off if I paid cash for the thing and forgot any depreciation claim? In other words, is it worth the trouble in the long run?
    Oh, and by the way, what is the difference between a laptop and a notebook, and can anyone give any personal recommendations or tips to a complete newcomer. :confused:
    Thanks in advance,
    Jayar
     
  5. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Laptop = Notebook ... same thing, different name.
     
  6. MrDarcy

    MrDarcy Well-Known Member

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    Not claiming a valid tax deducation is like saying you want to pay more tax :eek: Depreciation is about the easiest tax deduction you can get. On the 48% tax bracket, that's over a thousand dollars donated to Mr ATO if you don't claim. Even on the 10% tax that I pay, I claim still every cent I know/think/hope I'm allowed to claim.
     
  7. Glebe

    Glebe Well-Known Member

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    Jayar.

    1. Buy laptop for $3000.
    2. At tax time, recognise that this laptop has a useful life of 3 years. So after 3 years, it's worth $0 because it's obsolete.
    3. That being the case, if you use a straight line depreciation, it has cost you $1000 per year to have this laptop.
    4. Therefore, minus $1000 from your taxable income per year for 3 years.
    5. If you're earning good money, this translates to approx $485 saving per year.
    6. If you're a low income earner, this translates to maybe a $200 saving per year.

    So all in all your laptop has cost you perhaps half price because you're getting more of your pre-tax income back.

    I'm not an accountant, go over the fine print yourself.
     
  8. Tropo

    Tropo Well-Known Member

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    How about Flexirent the laptop instead of buying it? Is the monthly rate fully taxable? The problem is you do not own it at the end of the rent period.

    :) :confused:
     
  9. MrDarcy

    MrDarcy Well-Known Member

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    Don't forget their high interest costs. If you have the cash, or LOC, then that is a lot cheaper source of money.
     
  10. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Flexirent can be up to 18% or even higher - do your research ... really not worth it in my opinion. May as well put it on your credit card and get the FF miles if you are prepared to pay that much interest.
     
  11. Simon

    Simon Well-Known Member

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    Who wants to own a three year old computer? Can you have it updated through flexirent?

    I am looking at doing this next year as my wife will need a Laptop and a Palm thingy when she graduates from Uni. Very interested in the most efficient way of buying it - she will be able to salary sacrifice too.

    Thanks
     
  12. Tropo

    Tropo Well-Known Member

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    I do not know if it can be updated on flexirent. Just asking if somebody knows how it works.
    I do not have a laptop and I am looking as well for a best way to buy it.

    :)
     
  13. Nigel Ward

    Nigel Ward Team InvestEd

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    Troppo I think from memory the ability to upgrade by just handing back the old hardware and then just pay an "updated" payment for the new hardware was one of the touted features of flexirenting...

    But like Sim' I did the sums and it was too pricey to flexirent.
     
  14. PiggyBank

    PiggyBank Member

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    Gift from taxman

    Mr Darcy,

    I have recently purchased a PDA cum phone device as salary package. How do I make it double deduction? Thanks.

    Regards,
    PB
     
  15. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    NickM might be able to offer some suggestions here ... not sure when he is back from holidays - sometime later this week I think.
     
  16. MrDarcy

    MrDarcy Well-Known Member

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    How do I make it double deduction?

    Ask your accountant !!!!!!

    But for the record I...

    - purchased laptop from retailer
    - presented invoice to my employer who had (past tense now) a salary sacrifice scheme
    - they paid me by cheque to re-imburse for laptop purchase
    - they refunded the GST to me in after tax pay
    - they took the cost (about $3k) out of my pay over about 3 months
    - net effect I paid for it in pre tax dollars, no GST
    - depreciated in personal tax return as used 100% for investment (really)
    as I kept original invoice.
     
  17. NickM

    NickM Co-founder Staff Member

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    Mr Darcy is on the money :D
    Nick M
     
  18. TryHard

    TryHard Well-Known Member

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    Laptop packaging

    Hi guys

    The "Roam" magazine a month or 2 ago has a good article on Laptop packaging and the sample figures for the benefit accruing to the employee were :

    Salary $60,000
    Notebook cost : $3,000
    Tax reduction due to packaging : $1,252
    Depreciation (100 % business use) : $1,305
    Nett cost of notebook $443

    This was the nett cost over 3 years using the packaging method. An employee is allowed to be supplied a new notebook every year and its still FBT exempt.

    PDA's are also covered :
    http://law.ato.gov.au/atolaw/view.htm?find="2004/14"&docid=AID/AID200414/00001

    Gotta love tax effective toys :p
    Cheers
    Carl
     
    Last edited by a moderator: 16th Oct, 2005
  19. PiggyBank

    PiggyBank Member

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    Thanks Darcy and Tryhard for the info. Just wasn't sure if it was legal to double deduct.