Taxing Times – Are you claiming all your tax reliefs?
Know your entitlements
Over the past 24 months, there has been an increased interest in tax reliefs as remote working has changed the way many of us do business.
Of course, not everyone knows the ins and outs of what they can claim and because of this, it is thought that millions of euros go unclaimed every year.
This is money that is essentially being left on the table.
To avoid your cash meeting this fate, read on and note some of the tax reliefs that you may not know are available to you.
If you are interested in claiming your tax relief and refunds, it should be noted that you can only claim tax back for the previous four tax years.
Working from home
More and more of us are choosing to work remotely and with that, there are added household expenses. Fortunately, you may be able to claim tax relief on some of these costs.
When working from home, you can money back for the likes of electricity, heat and broadband. To qualify for this relief, you must have a formal agreement with your employer that you are required to work from home and be required to perform essential duties of employment at home.
You are not entitled to claim tax relief if you bring work home from the office outside of normal working hours, for example in the evenings or at weekends.
You can claim relief on most medical expenses, such as doctor or consultant fees and prescribed medication. There are some exceptions, such as routine visits to the dentist or optician.
This is a great way to put money back into your pocket, as you can get 20pc tax back on the cost of certain medical expenses and 40pc tax back on nursing home expenses.
Service Charges & Household Costs
Since January 2011, any expenditure you incur for Local Authority or Private Service Charges (refuse, water or sewage) cannot be included for tax relief.
However, it is possible to claim tax relief on certain housing expenses. For instance, The Home Renovation Incentive (HRI) provided an income tax credit to homeowners and landlords who carried out qualifying renovation and improvement works leading up to the end of 2018. Time is running out to make this claim though, as your HRI claim must be within 4 years after the year the qualifying work being paid for.
If you are a landlord, you can also deduct the interest on mortgages used to purchase, improve or repair rented residential property. However, interest can only be deducted during the period in which the property is let.
More information can be found in our guide to tax relief for landlords in Ireland.
A standard flat-rate expenses allowance is available for various classes of an employee, ranging from around €30 up to €700. For example, airline cabin crews are granted flat-rate expenses of €64 per year for the cost of maintaining their uniform or work clothes.
You can claim back tax relief at 20pc on fees paid for third-level courses for your children as well as for yourself or your spouse. The maximum relief on such fees is limited to €7,000 a year, which means you could get back up to €1,400 in any one year.
If you or your spouse cares for a dependent person in your own home, you and your spouse can get a home carer’s tax credit of €1,600 as long as the carer earns no more than €7,200 a year and you are jointly assessed for tax.
Tax relief at source
Relief for private health insurance premiums and mortgage interest for first-time buyers are usually applied at source.
This means that your lender or insurer will reduce your mortgage repayments or insurance premiums by the amount of tax relief you are entitled to each year.
Of course, the above isn’t an exhaustive list of tax relief that is available. If you would like to find out more, here is some additional reading and feel free to contact us for further information.