Ideas to reduce your Tax Bill

Whether you are self employed or employed, there is ways to reduce your tax bill. The amount of tax you pay very much depends on how much you are earning.


1. Keep accurate records

Ensure you keep all your records in order. It is easy to mislay receipts for goods you have paid for by cash. Ensure you keep all your business receipts.
Consider every expense – ensure all business expenses are recorded in your accounts. You may deduct legitimate business expenses.
You may include pre trading expenses, expenditure on trademarks and know-how & the cost of establishing an approved savings-related share option scheme for employees.
You may NOT include private expenditure, capital expenditure or client entertainment expenditure.

See corporation tax deductions for more information


http://www.revenue.ie/en/tax/ct/deductions.html

If you have a question about any of this please contact us at FLC .(JavaScript must be enabled to view this email address)


2. Ensure to claim all your tax credits available to you

There are tax credits available which may help you. Every individual is entitled to a tax credit depending on his or her personal circumstances.

See IT1 - Tax Credits, Reliefs and Rates on the revenue website.

http://www.revenue.ie/en/tax/it/leaflets/it1.html


3. Claim Losses against all other income

The Finance act 2001 stated that all trading and professional losses can be set against other income in the same year on a € to € basis.

Read more on the revenue website

http://www.revenue.ie/en/tax/ct/losses.html

4. Relief for Medical Expenses

You can claim a relief for medical expenses this year and last year.

It only applies to medical expenses that have not been reimbursed by a private health insurance company.

For more details check out the Guide to claiming Health/Medical Expenses Relief - IT6

http://www.revenue.ie/en/tax/it/leaflets/it6.html

To claim back your medical expenses download the med 1 form from our resources (forms & download section) section


5. Relief for Service Charges (Income Tax)

Relief is available for individuals who pay service charges and local authority. Relief is given for services that are paid in full and on time in the previous calendar year.

For more information please see form IT27 Tax Relief for Service Charges.
On our resources.

http://www.revenue.ie/en/tax/it/leaflets/it27.html


6. Relief for Research & Development for Companies 

A 20% tax credit for qualifying Research and Development expenditure exists for companies engaged in in-house qualifying research and development undertaken within the European Economic Area.
Section 766 TCA 1997 provides for a tax credit of 25% of incremental expenditure by a company, or group of companies, incurred wholly and exclusively on research and development (R&D).

 

Check out the guidelines from the revenue – See FLC Resources section

http://www.revenue.ie/en/tax/ct/research-development.html



7. Claim relief on Pension Contributions

By contributing to your pension fund makes sense from a tax and wealth building view.

You could contribute up to 40% of your remuneration / net relevant earnings to a pension fund. The earnings limit is set at €150,000 for 2009.

 

Age         Net Relevant Earnings
Up to 30 years                                   15%
30-39 years                         20%
40-49 years                         25%
50-54 years                         30%
55-59 years                         35%
60 and over                         40%

Contact FLC Banking and Finance section for more details on options on pensions
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8. The Business Expansion Scheme (BES) is a tax relief incentive scheme

The Business Expansion Scheme (BES) is a tax relief incentive scheme that provides tax relief for investment in certain corporate trades.

Read more in the The Business Expansion Scheme (BES) - Relief for Investment in Corporate Trades - IT 55
http://www.revenue.ie/en/tax/it/leaflets/it55.html

9. Renting a Room

Where you let a room in your main residential residence. Gross annual rental income up to €10,000 in 2008 and 2009 is exempt from tax

Read more in the Revenue Guide to Rental Income - IT 70
http://www.revenue.ie/en/tax/it/leaflets/it70.html

10. Live in a Heritage Property

If you incur expenditure on repairing, maintaining or restoring an approved heritage building or garden you can set the expenditure against your income from all source.



Finally ensure you file and pay on time! Failing to submit and pay your tax returns on time will lead to interest & penalties.
Check out our key tax deadlines
Contact Frank Lynch & Co FLC for all your tax needs



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