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Tax for IT professionals are always a burden as you are often in the highest tax bracket.
There are many strategies to improve your position such as increase your deductible items and decrease your assessable income.
Talk to us for more specific advices.
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IT professionals are full of ideas, they are often in the highest tax bracket which is 49%. One of the questions we get asked the most is that
I heard company tax rate is only 27.5%, can I use company to deal with my employer instead?
The quick answer is “no” if it is a PSI (personal service income).
PSI vs pSB
It is important to first find out the criteria of being qualified as PSI, and if it is, an individual need to ensure that if any specific tax rules are applicable to the income. If the PSI is not qualified for the current condition, the business will be a Personal Services Business (PSB). Once an individual is classified as a PSB, apart from the requirement of declaring any PSI on a tax return, there is no changes to the individual tax obligations.
As for PSB determination, two ways to be classified as using Personal Service Income Tool or Completing the PSB determination application form. Unusual business circumstances occur if following is met
- Business is temporary (< 12 Months) and out of the ordinary
- An individual passed the test in one or more previous income years
- An individual can reasonably expect to pass the test in following income year
Did you know ...
- We can help you to build a buisness
- Yes, in IT
- Yes, with accountants and advisers
- You can …
“paying tax is duty, paying more is not."
— Panbo Ye
plan of action
know your Goals
Do NOT trap yourself into selecting the best solution as there is no such thing. Each option is double edge sword and there are pros and cons. It is important to know your goals before discovering solutions with us. What your goals? Tips: pay less tax and earn more wealth are NOT goals, they are habits.
Think about your goals and what you really need.
Stick to your plan but don’t be stubbon. Do it right.
Review your plan, review the situation and adjust them accordingly.