Assets over $500 are capitalised and depreciated. The amount of the depreciation on the asset is all that reduces your taxable profit.
A lot of people get caught out with this and buy a large capital item thinking it will reduce their tax. All it does is reduce their cash-flow and make money tight for a while.
You should always check your cash-flow before making any large purchases or business decisions. Having your financial information up to date allows you to make informed decisions based on fact not on gut feelings.
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