We all hate giving money to the taxman. Part and parcel of living in Ireland. Income tax , USC, PRSI, DIRT tax, CGT, CAT…the list goes on and on . Below you can find some tips on how to reduce your tax liability for 2019. Lots of tax credits and reliefs go unclaimed every year. Why give your hard earned money to the taxman.
- Rent a room relief: Up to €14,000 can be earned yearly tax free if you rent rooms in your house. Beware of going over the €14,000 limit as the entire amount would be taxable.
- Relief may be claimed as a tax credit for medical expenses paid by you for yourself or for others. You can claim relief at the 20% rate. For example if you visit a GP and pay €50 . You can claim €10 of this back. Expenses qualifying for the relief include doctors’ visits, consultants’ fees, prescription medicine and physiptherapy
- Tax relief is also available for the cost of some dental treatments. Only non-routine treatments qualify for relief; for example crowns.
- Annual commuter ticket.Your employer can buy a monthly or annual travel pass for use on the bus, train, Luas, DART and ferry for you, thereby saving up to 52 percent (tax, USC and PRSI) on the regular cost of your travel ticket depending on your tax band
- College Fees.You may be able to claim tax relief at 20 percent for tuition fees paid for in respect of third level colleges, as long as the fees are fully paid and don’t exceed €7,000 per annum per student. The first €1,800 per year is disregarded. More information is available on revenue.ie
- Section 72 policy. Section 72 insurance is a revenue approved life insurance policy. The proceeds of this policy are tax free if used to settle an inheritance tax bill. It’s a life assurance policy to cover inheritance tax
- Pensions are the most tax efficient way of avoiding income tax. For example a 45 year old can save up to 30% of his gross yearly income into a pension and avoid income tax on the amount. Relief is given at the individuals highest rate of tax. A further are given to directors of limited companies who can also avoid corporation tax for their company by contributing to a pension.
- €500 Small Benefits Relief for Limited Companies. A non-cash benefit of up to €500 in value, tax-free, each year. This is usually given through gift cards on goods and services and reduces the tax implications for both parties
- Married couples should ensure that their tax credits and tax rate cut-off points are shared in the most tax efficient way depending on who is the higher earner. If one spouse is at home looking after the kids, they may be entitled to the home carer’s credit.
- Tax relief on Nursing home fees. Income tax relief is available on fees paid for nursing homes. You claim tax relief for nursing home fees under the general scheme for tax relief on medical expenses. Tax relief on nursing home fees applies at the highest rate of income tax that you pay. If you are paying the charges for a nursing home you can claim the tax relief, whether you are in the nursing home yourself or you are paying for another person to be there. If you have any questions Feel free to reach out to me anytime at bryan@wealthplan.ie or call me on 087 2408568. Thanks.
