With 4 weeks to go before the online deadline of 15th November ?here are some tax tips to consider before you file your tax return for 2011, If you have any questions on any income tax matters click here to contact us directly.
1. File your return on time ? late filing WILL result in an automatic filing surcharge which is based on 5% of the balancing ?tax liability. For proprietary directors it gets worse, as the surcharge is based on their tax liability before credit for any PAYE already paid ?OUCH!
2. Consider top up of personal pension payments ? additional pension payments can still be made up until 15th ?November and tax relief at 41% claimed for the tax year ending 31/12/2011/.Relief is based on your age & a % of your Net Relevant Earnings.
3. Review medical, dental & service charge expenses payments for 2011 as these are often overlooked in the rush to file your taxes.
4. Consider trading through a private limited company as the business taxes 0% OR 12.5% are much lower than self employed tax rates as high as 41% plus PRSI (4%) & USC (7%).
5. Ensure tax credits ?& standard rate 20 % band?s are utilised as these are not transferable to other years.
6. Proprietary Directors should consider paying a salary to their spouse or children to utilise their tax free credits and standard rate band?s
7. Non-domiciled taxpayers should review carefully what proportion of their income was Irish sourced and what was foreign sourced as only the foreign sourced income that was remitted to Ireland during 2011 has to be declared. Any foreign income that is also taxed in Ireland, you ?need to ensure you claim the foreign tax credit against your Irish tax liability on this income.
8. ?Self employed (especially home workers) should ensure they claim for expenses incurred ?wholly and exclusively? for business and apportion any dual purpose expenses.
9. Ensure loss relief claims are made. Trading losses can be offset against other income on a current year basis or carried forward to future trading profits. There is a two year time limit after the end of the tax year involved to make a claim for losses.
10. Review the long list of tax credits and allowances such as one parent allowance, home carers, ?employee tax credit, rental tax credit, film investment, college fees, home loan interest etc for any that may apply to your own circumstances.
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Tags: Non-Domiciled, Self employed, tax credits, Tax Planning
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