Posted by Jill Kerby on October 17 2016 @ 19:00
BE YOUR OWN FINMIN: CLAIM PERSONAL TAX REFUNDS BEFORE THE PAY & FILE DEADLINE
Budget Day giveaways and clawbacks will be forensically reviewed this week to see who benefits …and who will pick up the tab.
Whatever little shocks may have emerged from the Budget (and it tends to be well leaked) the most shocking thing is how many people fail to avoid overpaying their taxes every year: it is reckoned that perhaps as much as a billion euro lays unclaimed as taxpayers are unaware of, or too indifferent to the fact that they
The annual Revenue October 31 Pay & File deadline for self-assessed taxpayers is just 20 days away (you will get a fortnight extension if you file on-line) is the date when the self-employed and anyone with non-PAYE income must file their preliminary tax return for the year. But it is also the date on which PAYE workers can claim back tax credits, relief and allowances for the past year.
So what are the common tax credits and reliefs that you might reclaim for the past four previous years? They include:
- Pension contributions, for which top rate tax of 41% can be claimed, if you pay this higher marginal rate. For every €100 you contribute to your personal pension, you’ll be able to reduce your annual income tax bill by €41. Standard rate taxpayers will reduce their tax bill by €20 for every €100 pension contribution. A €5,000 contribution will reduce your 41% income tax bill by €2,050.
- Medical and dental expenses for the entire family. (These can be claimed anytime during the year under PAYE Anytime service at www.revenue.ie You can’t collect for expenses covered by private medical insurance or routine dental or opthalmic care.)
Doctors and consultants fees are covered, as are prescribed drugs and medicines and medical/surgical appliances including prescribed exercise bikes, wheelchairs, wigs, false eye, etc; prescribed physio-type treatments; specialised dental treatment; specialised speech and language treatment; in vitro fertilisation treatment; ambulance transportation, prescribed special food for diabetics, coeliacs, etc. Ancillary costs for home dialysis (a portion of electricity, laundry, telephone costs) and longer travel expenses associated with prescribed/required medical treatments, such as weekly dialysis or cancer treatments. Nearly all tax relief is at the standard rate of 20%.
- Guide Dog flat rate relief of €825.
- Nursing home expenditure at top tax rate of 41%. This is available to either the patient or anyone paying all or part of their nursing home costs.
- Rent tax credit. The credit is only available to people who have been renting a property since December 7, 2010 and will be phased out by 2017. Different credit rates apply to over 55s who are Single, Widowed or Surviving Civil Partner, Married or in a Civil Partnership and under 55s in these categories. Single people, under or over age 55, for example will only receive a tax credit of €80 this year, but if they have no claimed the credit for the previous four years, they could also collect €120 for 2015, €160 for 2014, €200 for 2013 and €240 for 2012. (Double the amount for married couples/widowers.)
- Private Health Insurance tax relief at 20%: This relief is usually credited to individual holders of health insurance at source, but not if your employer pays the premium, which is also liable to Benefit in Kind tax. In the case of a top family plan, worth c€3,000, the total tax relief for four previous unclaimed years could be worth €2,400 according to Dermot Goode, of www.TotalHealthCare.ie, a specialist broker.
- Home Renovation Tax Relief of 13.5% VAT over two tax years. To claim this relief you need to ensure that your builder is both registered as tax compliant with Revenue and has completed their submission.
It isn’t as complicated as you might think to file your own tax return, if you have non PAYE income to report. Check out the Revenue On-line Services site, www.ros.ie and follow the registration and filing instructions. It takes a couple of days for passwords to be issued, so don’t leave it to the last minute.
If you are uncertain or nervous about filing your return by yourself – or, if, say, you have a rental property but are not sure what deductions you can claim – then make an appointment to see a good tax adviser or accountant. Establish their fee or charges from the start.
If you want to set up a pension, or top up an existing one consult a pension expert or, ideally, a trained, experienced, fee-based financial planner. The former usually involves a sales process that rewards the manufacturer and sales intermediary first; the former is a holistic process that takes into consideration your wider financial position in the effort to find a cost-effective, appropriate and realistic retirement solution.