Paying taxes is one of life’s certainties, but one thing you can avoid is paying a bigger tax bill than you need to
If the thought of sitting down to sort out your pension, claim expenses or sort through receipts makes you want to bury your head under the duvet, you’re not alone.
However, the truth is that with just a few simple strategies and a couple of hours of your time, it could save you thousands of euros. As it stands, there are several actions you can take to maximise your tax benefits, avoid overpaying on your taxes and reduce your tax bill for the year.
Nick Charalambous, financial advisor and Managing Director of Alpha Wealth, shares four simple ways he encourages all workers in Ireland to pay less tax.
1. Make the most of your pension
Do you have a pension? If not, start one immediately because Nick’s number one tip is to focus on your pension.
“By being savvy with your pension contributions, you can get a significant amount back from the taxman,” he explains. “For example, if you are earning over €42,000 per year and you put €60 extra into your pension, this is uplifted by the tax man to €100. This is a 66% boost at the outset, and the pension grows tax-free whilst the money remains in the pension.”
2. Employment Investment Incentive Scheme (EIIS)
The second thing Nick advises is that you look into the tax-back advantage available from the Government Employment Investment Incentive Scheme (EIIS).
“You can get up to 50% tax back over four to five years by investing in one of seventy or so Irish companies ranging from established to new start-ups with a contribution of €5,000 or more.”
3. Give a Gift Allowance to your children
Take advantage of the Gift Allowance Scheme for your children to reduce your overall tax bill.
“The tax man will allow you to “gift” your kids up to €3,000 per year per parent and has no tax implications whatsoever,” Nick explains. “If you give them larger amounts, it will potentially be taxed. Passing monies over a long period is a great tax tool to use and is really easy and effective.”
4. Claim expenses
By getting familiar with the Revenue Online System (ROS) you use it to claim a number of expenses, from medical expenses to rent relief and working from home costs, as well as a host more.
“It is really simple and allows you to go back up to four years, so there could be several hundred or thousand you can claim for a few clicks of a button, hassle-free,” Nick explains.
For more information, visit alphawealth.ie
