Article
10 ways to save money on this year’s tax return
10 simple steps you can take in 2023 to reduce your tax bill
Everyone wants everything filed accurately minimising the risk of a Revenue enquiry into their tax affairs. However, people also want to reduce their tax bill. They only want to pay what they need to and not a cent more.
Here are 10 simple steps you can take to reduce your tax bill:
1. Pay money into a pension
Your age and your earnings for the year will determine the maximum amount that you can pay into a pension which will attract this tax relief.
If you pay tax at the higher rate of 40% then for every €1,000 you pay into a pension plan you could potentially reduce your tax bill by €400.
Another big advantage is that when filing a Form 11 (and you pay and file on ROS), the payment deadline in respect of a pension contribution is extended in line with the income tax pay and file extension date.
2. Claim relief for your employer paying medical insurance on your behalf
- the date the policy started
- who is covered on the policy and their ages
- a breakdown of the cost of the policy for each person
- the amount paid by your employer
3. Claim the Home Carer Tax Credit
- Child for whom Child Benefit is payable
- Person aged 65 or over
- Person with a disability who requires care
4. Claim the Year of Marriage Tax Credit
You will continue to be taxed as two single people in 2023.
You may however qualify for a refund. You qualify if you pay more tax for the year, as two single people, than you would if you had been taxed as a married couple. If you are due a refund, it will only be given for the portion of the year that you were married.
5. Claim Income Continuance tax relief
The relief you can claim is limited to 10% of your total income for the tax year.
6. Claim Home Expenses
If you are an employee and you worked from a home office in 2023 you can claim an allowance, assuming your employer is not already giving you one.
For 2023 and subsequent years, you can claim 30% of the cost of electricity, heat and broadband. The tax relief is calculated based on number of days worked remotely.
For self-employed people you need to decide where the line between home and work sits. Costs you can partially deduct include lighting, heating, phone, broadband and home insurance. There is no hard-and-fast rule, but make sure what you deduct is reasonable.
The e-working guidelines aimed at PAYE workers who have been working from home during the pandemic offer a good rule of thumb for self-employed workers.
7. Claim the rent tax credit
A rent tax credit was recently re-introduced by Revenue, commencing in the 2022 tax year. If you are a tenant in an Irish property you can now claim a rent tax credit to a maximum value of €500.
And if you are a jointly assessed couple (i.e. spouses or civil partners) you can each claim up to the €500 limit annually. So if you and your wife have been renting across two years this could potentially be worth €2,000 to you!
In order to qualify the tenancy should be registered with the RTB (unless it is a digs type arrangement, or part of the Rent-a-Room scheme). And note you will not qualify if you are in receipt of rent allowance, or HAP payments.
8. Mortgage Interest Tax Credit
The Mortgage Interest Tax Credit is available for the 2023 tax year only and is designed to provide financial relief based on the increase in mortgage interest paid in 2023 compared to 2022.
- It applies to homeowners with an outstanding mortgage balance between €80,000 and €500,000 as of 31 December 2022.
- The taxpayer must be up to date with Local Property Tax.
- The credit is calculated on the increase in interest paid in 2023 over the interest paid in 2022.
- The maximum relievable interest is €6,250, resulting in a maximum tax credit of €1,250 per property at the standard tax rate of 20%.
9. File on Time!
10. Talk to a Professional
Book your FREE Initial Consultation
Date published 8 Oct 2020 | Last updated 12 Sep 2024
This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.Choose the right accounting firm for you
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