Budget 2024 outlined how Government plans to spend the money it raised from tax revenue.
While there has been much discussion about windfall corporation tax receipts, it is income tax that is the biggest source of all tax revenue.
Revenue is looking to collect a large portion of that income tax for 2022 in the coming weeks.
The deadline for self-assessed tax payers is Tuesday, October 31, while the deadline for those filing and paying online is Wednesday, November 15.
Who is required to file and pay an income tax return?
People who are self-employed, contractors or sub-contractors are required to file an income tax return.
Landlords, directors of companies or proprietary directors with shareholding in excess of 15% are also self-assessed tax payers.
Income made by influencers on social media platforms is also liable to tax.
PAYE workers who earn income outside their normal job may be obliged to file too. Any income in addition to PAYE income such as capital gains, profits from investments and cryptocurrency is liable to tax.
PAYE workers will be required to file a tax return where their total gross non-PAYE income is in excess of €30,000, or net assessable income is in excess of €5,000.
PAYE workers with income of less than €5,000 that is not coded into their tax credit certificate are also required to file a return.
Which documents do self-assessed taxpayers need to file?
The type of form that must be filed is determined by the amount of self-assessed income and how much you make as a PAYE employee.
A Form 11 tax return must be filed if taxable income exceeds €5,000 or gross non-PAYE income is more than €30,000 per year.
A Form 12 tax return must be filed if taxable income is less than €5,000 per year and gross non-PAYE income is less than €30,000.
What expenses can be claimed to reduce a tax bill?
There is a wide range of expenses that can be claimed in order to reduce a tax bill.
These can only be claimed if they have 'wholly' and 'exclusively' occurred for the purposes of the taxpayer's trade. Costs that were incurred exclusively for personal use cannot be included.
For example, if a car is both for personal and business purposes, expenses can only be claimed that were incurred during the time the car was used for business purposes.
Business expenses that can be claimed
There are a number of expenses that can be claimed on a tax return if the use of office space is paid for, including:
- Rent
- Utility bills - heating, lighting, telephone, and broadband
- Premises insurance
- Annual wear and tear allowance of 12.5% can be claimed over 8 years for the cost of capital expenditure on plant and machinery.
If a car is for business purposes, a number of expenses can be claimed, such as:
- motor tax
- insurance
- service
- tires
- driver's licence costs
- NCT
- repairs
If you pay for the services of an accountant or financial agent to help you to file your tax return, you can deduct these costs on the return.
Personal expenses
There are a number of common expenses which qualify for tax relief:
Every taxpayer is entitled to claim tax relief on the qualifying medical expenses incurred during the tax year, including:
- Doctor and consultant fees
- Prescriptions
- Non-routine dental care
- Laser-eye surgery
- Routine maternity care
If you have paid for any of these expenses, you are entitled to claim 20% of the cost back in tax relief.
If you are a higher rate tax player and have incurred nursing home expenses, you can claim back 40% of these costs in tax relief.
If you have paid college fees for yourself or a loved one, you may be entitled to claim 20% of the cost back in tax relief.
If you own a rental property, you may be entitled to claim tax relief for expenses:
- Mortgage Interest
- RTB Registration
- Repairs and Maintenance
- Wear and Tear
- Advertising Expenses
- Estate Agent Fees
- Insurance Premiums
Should you file your own tax return or enlist the support of a tax agent?
It is possible to file your own tax return using Revenue Online Service.
"The only advantage of filing yourself is that it's free," said Marian Ryan, Consumer Tax Manager with Taxback.com.
"However, it can be difficult to manage your tax paperwork alone. And the burden of ensuring you are claiming every relief and credit you're entitled to will lie solely with you. What’s more, if Revenue selects your return for Audit, you will have to manage this additional time-consuming admin on your own. The good news here is that accountancy fees are a tax-deductible expense."
