2017 Tax Planning Checklist: Personal Service Income

Contactor's Income

Taxation law includes measures that are designed to limit the deductions available to certain contractors whether operating as a sole-trader or through a company, trust or partnership. These are known as the Personal Services Income (PSI) measures. A taxpayer who meets certain specified tests will be treated as carrying on a personal services business and will be able to claim a wider range of deductions. If you are operating a personal services business, you need to be aware of the strict approach to income retention and income splitting.