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alisonmckinley
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+ 1 for “don’t worry about it.”
Most people have heard about the “80%” rule, but it is possible to fail this and still pass the other Personal Services Income (PSI) tests.
There are four PSI tests, but only two concern the likes of you and me; the 80% test, and the “results” test.
You can earn 100% of your contracting income from one source, provided you are paid for the end “result”, rather than by the hour.
The key question the ATO could ask you is “if you do a poor job, will you be required to go fix it at your own expense?”
If the answer is “yes” the you’ve passed the results test.
Your 2012 tax return will have a PSI section. Answer yes to the question “do you satisfy the results test?”
I’ve found this subject to be poorly understood by some accountants. If your accountant gives you any grief, find another one.
Matt
http://resumeperk.com

Totally agree with the statement “if you do a poor job, will you be required to go fix it at your own expense?”. Passing the PSI test may be tough process, however, I think that there is nothing impossible with proper preparations. It is similar with job searching process: passing the interview depends on your resume you have submited. Thanks. Alison