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
By Tadhg MoriartyEveryone 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.
Need support with your Tax Return?
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Or contact us6. 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
Looking for an accountant to file your Tax Return?
Contact TaxAssist Accountants for a free, no-obligation consultation.
Or contact us
Frequently Asked Questions
If you make any money outside of your normal PAYE income from your job then you need to file a self-assessment tax return each year. The form you need to file is called a Form 11.
Some common reasons you may need to file a tax return include; you are self-employed, work freelance or as a contractor, you are a landlord or make money using Airbnb, you are the director of a company, you own shares, you have sold a personal asset or sold all or part of your business, you have inherited money, you make some extra cash doing nixers.
For those that use Revenue Online Services (ROS) the pay & file deadline is Thursday 14 November 2024.
The form you fill in to file a self-assessment tax return in Ireland is called a Form 11. People use the terms tax return and Form 11 interchangeably.
You can file a Form 11 tax return yourself with Revenue online using Revenue Online Services (ROS) or you can engage an accountant to file on your behalf.
An allowable expense is an expense that is directly related to the running of your business. For example goods that you buy for resale, employees' payment, rent and bills for your business premises, interest payments for money you borrowed to finance your business.
Tax Credits reduce the amount of tax that you pay. The tax credits you are entitled to are dependent upon your personal circumstances.
Another great way to save money on your tax bill is to pay into a pension. The government offers generous tax relief at your highest tax rate.
You can pay the tax you owe online through ROS with a debit or credit card.
In order to fulfil your preliminary tax obligations for 2024, a payment should be made along with the filing of your 2023 tax return. Preliminary tax is an estimate of the tax you will owe on next year’s tax return.
You have three options when deciding what level of preliminary tax you should pay:
- Based upon 100% of your 2023 tax charge.
- Based upon 90% of your 2024 tax charge (this will need to be an estimate at the time of filing the return).
- 105% of your final tax charge for the pre-preceding tax year (2022). This option is only available where preliminary tax is paid by monthly direct debit.
If you miss the tax return deadline there are a number of consequences. You will be charged interest and a late filing surcharge.
Filing late can increase the likelihood that you will be chosen to be audited by Revenue and uou could lose your entitlement to government grants and subsidies as businesses must be entitled to a tax clearance certificate to qualify for these schemes. If you have missed the deadline the most important thing is to get the return filed as soon as possible.
Date published 8 Oct 2020 | Last updated 25 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.
Tadhg Moriarty
Tadhg Moriarty is a highly skilled Chartered Accountant, Chartered Tax Consultant and Chartered Tax Advisor with over 15 years of experience. Tadhg has worked with private clients and family run enterprises and has a deep understanding of the unique challenges faced by these businesses. He is committed to helping his clients optimise their tax positions and improve their financial performance.
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