The company’s finances have been in the news again over the last week after it announced plans to close plants and cut thousands of jobs. By 2010, it was again profitable, and it has essentially been very profitable ever since. It suffered huge losses leading up to its 2009 bankruptcy. The tax break is designed to help struggling companies get back on their feet. Most businesses lose money at some point. The tax break, known by the wonky name “net operating loss carryforward,” is one the most common tax breaks in corporate America. Federal law allows companies to use past losses to shield future profits from taxes. But the automaker has paid essentially no federal income tax to Washington since it came out of bankruptcy.Īnd GM probably won’t have to pay much in federal taxes for at least the next five years.
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However those looking to buy a more expensive vehicle and claim its full value up to the extended $150,000 cap need to check whether its payload is above 1000kg.General Motors has earned tens of billions of dollars in profit over the past decade. “A car limit applies to passenger vehicles of $57,581 for the 2019–20 income tax year.”īusiness owners buying a car worth less than $57,581 – whether it’s a ute, van, truck, or regular passenger car – can claim the full amount under the scheme, depending on what percentage of their driving is work-related. “A vehicle is considered a passenger vehicle if it is designed to carry less than 1000kg and fewer than nine passengers. “A dual-cab ute that has a payload below 1000kg and can carry fewer than nine passengers is considered a passenger vehicle,” an Australian Tax Office spokesperson told CarExpert. For the purposes of the Instant Asset Write-Off scheme, the Australian Tax Office considers a commercial vehicle to be one capable of carrying more than nine passengers, or with a payload above 1000kg. There are two separate caps for vehicles:įor the official Australian Tax Office breakdown of the caps, click here While the increase is generous, there’s a catch in claiming the full $150,000 when you’re buying a new vehicle. Initially set to end on June 30, the more generous cap has since been extended until December 31, 2020. Originally the cap was set at $30,000 but on March 14 the Federal Government announced it would increase that amount to $150,000 for businesses with an annual turnover below $500 million. The Federal Government established the Instant Asset Write-Off to help businesses reduce the cost of doing business by offering tax offsets for the purchase of goods required to operate their business, this includes vehicles. UPDATE, 11:00am – We have pulled the story forward as June 30 approaches. The story has been brought forward on the website. UPDATE, 11:50am – We have updated the text of this story with a quote from the Australian Tax Office. UPDATE, 7:10pm – We have updated the text of this story to more clearly explain how the Instant Asset Write-Off purchase price caps work, and have added an additional table to the end of the story. Ute, van, and truck buyers now have more time to spend big on a new work vehicle and qualify for the more generous Instant Asset Tax Write-Off scheme.
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