In this Video I walk you through step-by-step on how I determine if my sole trader business income is classified as Personal Service Income in my Australian Individual tax return using myTax, after linking your myGov account with the ATO, or Australian Tax Office.
I often get asked how I prepare my tax return in Australia if I earned income from driving for Uber Eats, Uber Ride sharing, Amazon delivery driver, or selling products on eBay or Etsy. Sometimes its I'm an Instagram influencer or a RU-vidr or an artist. Then I get asked, is this business income and do I declare it as employment income, personal service income (PSI) or business income? Hopefully this video will guide you to where you can find the answers.
LINKS
💰 Use SHARESIGHT to track your shares - www.sharesight.com/moneywithdan/
(BONUS When you signup using this link, the first 4 months of subscription are free if you choose to upgrade to advanced plan and I may get a small my commission at no extra cost to you, so we both win!)
💰 The Excel Template that I use to track my taxes can also be purchased at my online store here: www.etsy.com/au/shop/MoneyWit...
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ATO LINKS
🔗 Personal services income (PSI) www.ato.gov.au/businesses-and...
🔗 my.gov.au/
🔗 www.ato.gov.au/Calculators-an...
🔗 MyGov help login.my.gov.au/mygov/content...
🔗 Claiming deductions for personal super contributions www.ato.gov.au/individuals/su...
DISCLAIMER: it is important to note that the information in this video is for general information and entertainment purposes only and is not a replacement for professional advice. Money with Dan is not a financial advisor. You should consider seeking independent legal, financial, taxation or other advice to check how the information in this video relates to your unique circumstances.
Income that is PSI
Personal services income (PSI) is income produced mainly (more than 50%) from your skills or efforts as an individual.
On this page
What is PSI?
Who can earn PSI?
What is PSI?
Income is classified as PSI when more than 50% of the income you've received from a contract is a reward for your personal efforts or skills, rather than being generated by the use of assets, the sale of goods, or from a business structure.
When working out if your income is PSI, you need to look at the income you have received from each contract separately.
The terms and conditions of the contract, as well as invoices and written agreements that detail the work arrangement, are important in working out if the income is PSI. These can help you to work out what percentage of income from each contract was for:
your labour, skills, knowledge, expertise or efforts, and
anything else, such as the materials supplied or tools and equipment used.
If 50% or less of the income received from a contract was for your personal efforts or skills, then none of the income from that contract is PSI.
Who can earn PSI?
You can receive PSI in almost any industry, trade or profession. Common examples include but are not limited to:
financial professionals
information technology consultants
engineers
construction workers
medical practitioners.
As PSI is mainly a reward for an individual's personal efforts or skills, only individuals can earn PSI. Individuals can earn PSI either directly as a sole trader, or through another entity such as a company, partnership or trust. When an individual earns PSI indirectly through another entity, that entity is referred to as a 'personal services entity' (PSE).
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6 авг 2024
