Tax Tips

Every year, millions in tax refunds go unclaimed. The main culprit? Many simply aren’t informed about what they’re entitled to. Don’t let your hard-earned money slip away due to a lack of knowledge.

PAYE, or “Pay As You Earn”, is a straightforward system employed by the Irish Government. It ensures that the appropriate amounts for income tax, USC, and PRSI are deducted from your wages based on your earnings. Essentially, before your paycheck reaches you, these deductions are made and directly remitted to the revenue, which then channels it to the Irish Government. This system aims to simplify tax payments for employees. However, it’s always wise to verify if the correct deductions are being made!

Anyone working in Ireland is typically subject to income tax through the PAYE system. While no one relishes parting with their hard-earned money for taxes, there are legal ways to ensure you’re not overpaying. Stay tuned for our top strategies to minimise your payments to Revenue and keep more of your earnings in your pocket!

Organise your documents! Always retain receipts for medical visits, non-routine dental care, and similar expenses. By doing this, you can claim back 20% of these costs against your annual tax dues. Remember, Revenue might ask for these receipts within six years, so store them securely. It’s a straightforward way to ensure you’re not overpaying on taxes!

Tax is calculated as a percentage of your income. Your tax credits are deducted from this to give the amount of tax that you have to pay. A tax credit will reduce your tax by the amount of the credit. Depending on your circumstances, you may be entitled to:

Rent Tax Credit

The amount of Rent Tax Credit you can claim will be calculated for you when you submit your claim. This amount will depend on the amount of rent you pay and Income Tax you pay.

Home Carer Tax Credit

You can claim the Home Carer Tax Credit if you are married or in a civil partnership, and you care for one or more dependent persons. You can only claim one credit, regardless of the number of people you care for. You cannot claim this credit if the dependent person is your spouse or civil partner.

Single Person Child Carer Credit

If you care for a child on your own, you may be able to claim a tax credit called the Single Person Child Carer Credit (SPCCC). The SPCCC is given to the person who lives with the child for the whole or greater part of the year (more than 6 months) – called the primary claimant.

If you’re in a specific profession, you can claim for everyday work expenses like tools, uniforms, or mileage. These are known as flat-rate expense allowances.

For instance:

• A nurse supplying and washing their own uniform? They can claim up to €733.
• An engineer or electrician buying their tools and overalls? They can claim €331.

Always check if your profession qualifies for these allowances.

Getting married isn’t just a romantic decision; it can also be a smart financial move! How? The Irish tax system generally benefits married couples. If you earn significantly more than your spouse or are not using all their tax credits, you can shift some of their credits to yourself. This action reduces the combined tax you both owe. If you’re newlywed, ensure you’re maximising these advantages.

Indeed, contributing to a pension is not only preparing for retirement but also a savvy tax move. For higher-rate taxpayers, every €100 invested in a pension could cost only €60 out of pocket. The remaining €40, which would have gone to the taxman, now helps secure your future. It’s a win-win: more for your retirement, less for the tax authorities!

Get on board with the Cycle-to-Work Scheme, a green initiative from 2014 designed to promote cycling as your daily commute. Here’s how it benefits you: Your employer fronts the cost for your bicycle and related gear, and you repay them through a year’s worth of salary deductions. The best part? Those repayments are free from income tax, PRSI, and the Universal Social Charge.

Planning on getting an electric bike or an upgraded bicycle? As of August 2020, the cap has been raised to €1,250 for standard bikes and €1,500 for electric ones. Make your purchase at any registered cycle store.

Here’s a quick math: If you’re taxed at the higher rate and decide on a €1,000 bike, your out-of-pocket expense, spread over 12 months, is just slightly above €500. Ride and save simultaneously!

Unlock savings on education costs with tax relief on third-level courses! Whether you’re hitting the books full-time or part-time, you can claim a 20% tax rebate on qualifying fees.

Here’s the deal:

• Tax relief is capped at €7,000 per course annually.
• For full-time students, the initial €3,000 is exempt from relief.
• For part-time students, the threshold is €1,500.

Remember that these limits apply to your first claim within the tax year. If you’re paying for more than one course in the same year, subsequent claims bypass these initial thresholds, and you can claim on the entire fee up to the €7,000 ceiling.

Who can benefit? The person who foots the bill gets the relief, not necessarily the student.

Education is an investment, and tax relief can make it more affordable. Don’t leave money on the table—claim what you’re due and make the most of your educational journey!

Maximise your home’s potential and turn those empty rooms into a tax-free income source! With Ireland’s ‘Rent-a-Room’ relief, homeowners can rent out spare rooms without the formalities of typical landlord registration.

Key Points:

• No Need to Register: Save time and hassle as you won’t need to register as a landlord officially.
• Informal Agreements: Your rental agreements can be more relaxed than landlord-tenant contracts.
• Tax-Free Earnings: Earn up to €14,000 annually from rental income without paying a cent in tax. x

Turn vacant rooms into valuable assets. Start renting and enjoy the benefits of the ‘Rent-a-Room’ scheme!

Attention stay-at-home parents and those earning less than €10,400 annually! Did you know you might be leaving money on the table?

Key Points:

• Potential Rebate for Stay-at-Home Parents: Over 60,000 parents might be eligible for tax relief for caring for dependents.
• Work and Still Qualify: Even if you’re employed, as long as you earn less than €10,400 annually, you might qualify.
• Don’t Miss Out: Many don’t claim because they either don’t know about this rebate or aren’t sure if they qualify. For instance, a spouse handling childcare full-time is likely eligible.
• Want More Info? Dive into our guide, “How Can I Claim Tax Back”, to get all the necessary details.

Don’t leave money unclaimed! Check your eligibility and ensure you’re benefiting from all tax reliefs available to you.

Attention Irish Remote Workers!

Here’s What You Need to Know:

• Remote-Worker Tax Relief: Due to COVID-19, many are working from home and could be entitled to this relief.
• What is it?: A tax break on certain expenses you might have while working remotely.
• Who Qualifies?: If you’re spending a significant amount of time working outside your usual workplace, you likely qualify.
• Full or Part-Time: Whether you work from home all the time or just some of the time, this relief could be for you.

Ensure you’re not missing out! Check your eligibility and make the most of the tax reliefs available to you.