What’s ahead in the new year on the tax front  -  will you be getting any benefit out of the recent tax changes that have been announced?

Compared to recent years, the 2011 Federal Budget did not introduce any major changes, however, some new measures were outlined which will no doubt impact on how you manage your financial affairs and plan for your retirement.

In addition to the specific budget announcements, we now face the prospect of having to deal with the impact of the carbon tax which is expected to increase the cost to both individuals and businesses alike.  Cost increases will mean that you will need to factor these in any financial or business plan you put in place in the future.

If you have incorrectly classified yourself as a personal services business (PSB) instead of reporting personal services income (PSI) be on notice that the Tax Office will be conducting audits to ensure tax payers have correctly classifed themselves.   The Tax Office have advised tax agents that they intend to start audit activity in this area.  An extract of the notice states:

"we will write to some taxpayers who have reported personal services income (PSI) and may have incorrectly self-assessed themselves as conducting a personal services business. If one of your clients is selected for this mailout, you will receive a letter in advance that will include:

• a copy of the client letter
• a list of your clients affected