Timely reminder on Personal Services Income
Written on the 13 January 2012 by Macmillans Waller Fry - Accountants
During January 2012, the Australian Taxation Office (ATO) will be in touch with various taxpayers who have reported PSI and may have incorrectly self-assessed themselves.
PSI refers to income that is mainly a reward for an individual’s personal efforts or skills.
Taxpayers must determine whether they have earned PSI and conducted a personal services business (PSB) in an income year. As a result, entitlement to certain deductions and reporting obligations may be affected.
This action by the ATO is a timely reminder to check if you are affected by PSI rules. A voluntary disclosure is necessary if affected taxpayers believe they have incorrectly self-assessed their status in prior years.
Taxpayers should consider the PSI rules when lodging their income tax return. If a taxpayer has income that passes one or more of the four PSI tests for the income year, the PSI rules may not apply for that year.
If you are unaware of your PSI status, contact us today to have your circumstances assessed.
Author: Macmillans Waller Fry - Accountants