Lead Financial Solutions

𝐏𝐒𝐈 𝐚𝐧𝐝 𝐏𝐒𝐁𝐈

Recently attended a well-respected tax expert, John Jeffreys, webinar on PSI and PSBI updates. The legislation remains unchanged: any PSI and PSBI must still be declared in a practitioner’s personal tax return, except for business income in accordance with ATO IT 2639, paragraph 8.

During the webinar, a small group of accountants were surprised to learn that PSBI net income must still be declared in the practitioner’s name. They had been incorrectly quarantining practitioners’ PSBI in a company.

Unsurprisingly, clients sometimes ask why their friends or colleagues can quarantine their PSI or PSBI in a company to minimize tax. One new client, previously with a second-tier accountant, had his PSBI incorrectly quarantined in a company - frustrating!



Photo by Petr Magera