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How an Accountant Can Help You with Personal Services Income (PSI)

The management of Personal Services Income (PSI) is not so easy in most of the cases if someone is a freelancer, contractor, or sole trader. Pay from skill or from your exertion is known as PSI and it is importantly to know its tax rate. This is where an Accountant in the Eastern Suburbs of Sydney can turn the tables for you in a big way.

Clarifying PSI Rules

PSI is regulated and enforced by the Australian Taxation Office, but you may need an accountant to discover if your income is permitted. This differentiation is important because PSI influences how you and your accounting services declare earned income and allowable deductions. A qualified accountant will look at the contacts and activities to determine whether you are passing the PSI tests, or whether you are a Personal Services Business, which entitles to different treatments.

Maximizing Deductions

PSI can reduce the amount of deductable loss you can claim further. An accountant will help decide which expenses are legitimate enough to reduce your taxes such as home office expenses, tools required for the trade, or industry particular costs. They’ll also prevent you from making claim that would lead to compliance audit as they will keep you informed.

Structuring Your Business for Efficiency

In case you are among the PSI, your accountant can advice on how to reduce your taxable income as much as possible, provided you will act legally. This might include possible company restructuring to establish some form of a business entity such as a company or a trust and that in doing so, flexibility and tax gains could be achieved.

Compliance and Tax Filing

There is an emphasis on the quality of the report. A Tax Accountant Eastern Suburbs Sydney makes sure you are compliant with all ATO regulations and complies with the requirements correctly. This can help you avoid paying penalty as well as facing an audit issue while on the other side helps to ensure you get the highest refund as possible.

Therefore, with the help of an accountant, your financial management is more efficient, you follow all the rules of PSI and you do not worry about taxes as much as you develop your company.