Depreciation

So you're self employed and you have depreciation in your financials. Hey, it's Aaron Wybrow from Diagnostics and Finance. I just wanted to talk about depreciation for a second because recently with all the support that the government's giving into self employed people, there's a thing called instant write off. If you have bought an asset and you've had instant write off, that is technically depreciation but the banks are going to treat it differently. Did you know that instant write off is not treated like depreciation? Depreciation is actually added back to your add backs as 100%. But when you got instant write off of depreciation, they actually add it back as a non recurring expense. Hence that's all taxed and it will change your borrowing capacity. So if you bought a car and you've got instant write off of 50 grand, that's going to be added back like net profit. Some banks may treat it differently, but in the main, most banks are wanting to see the difference between instant write off and accumulated depreciation. So if you are a self employed person looking at 2019, 2020 or even preparing your 2021 tax returns, let's look at the lending strategy. If you need to buy your next home or you need to buy your next investment property. Hey, it's Aaron from Diagnostics and Finance. Drop your comment below. Happy to help you along your journey.