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PSI Personal Services Income

If you received income for personal services as a sole trader, you need to be aware of special rules applying to this income. Introduced in 2001, Personal Services Income (PSI) rules applies to prevent individuals from “alienating” their PSI to either a partnership, company or trust and can operate to restrict “business” deductions.

Personal services income is income that is mainly a reward for an individual’s personal efforts or skills and can include:

Examples of personal services income are:

Where it applies, the PSI rules can affect the tax treatment of income in different ways:

Complicated rules apply to whether income from personal exertion is PSI or not. If you think PSI rules may apply to you we recommend you book an appointment with one of our tax consultants.

For more specific information and advice on business structures and business startups, contact Maynard Accounting today on 3208 3888.

Remember, when you use Maynard Accounting to setup your business you receive our unique 13 point Business Start-up Checklist.

Check out our post on Business Structures – Which one for me.

 

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