SELF-EMPLOYED? Best WAYS TO REDUCE INCOME TAX IN IRELAND

Are you self-employed in Ireland? And, filing your income tax return every year? And want to know how to pay less tax as a self-employed person? This article is for you. If you want to save money on your taxes next year, know that there are many ways to do it. Filing your taxes can be a boring activity and something you don’t necessarily look forward to. However, if you want to save money and reduce taxes in Ireland, you should prepare in advance.

Here are the 6 best ways to reduce your tax bill:

1. Invest in a self-employed pension To Reduce Tax

Having a pension when you are self-employed is essential, mainly because it allows you to prepare for your retirement. But one of the other important advantages of a pension is tax relief.

Indeed, when you make pension contributions, you get self-employed tax relief on those contributions, as they are not counted as part of your income by Revenue. Therefore, not only are you investing for your future but you are taxed at a lower rate since your taxable income is lower.

So if you haven’t started a pension yet, now is the time. Learn more about pensions for self-employed people here

2. Claim your Business-related Expenses

How to pay less tax by claiming your business-related expenses? Another way to reduce your self-employed tax is to claim all your business-related expenses. Your tax bill depends on the profit that remains after you deduct the expenses. In order to pay less income tax, you will need to deduct certain business expenses from your profits, which allows you to save tax.

2. Claim your home office expenses

How to pay less tax by claiming your office expenses? Working at home has become an integral part of our daily life. If you work from home and your home is also your office, then some self-employed tax relief may be available to you.

Revenue can deduct part of your household expenses. This may include some or all of your bills for electricity, water etc.

3. Claim your travel expenses 

How to reduce tax by claiming your travel expenses? When you leave your normal place of work, your travel fees, accommodation and the cost of your food while away, can be deducted from your business expenses.

Indeed, all vehicle expenses such as gas, insurance, repairs, and maintenance fees qualify for tax relief. If you’re not driving there, you can also claim expenses such as transport costs (Taxis, buses, trains & planes).

You should also know that if you drive the same vehicle for both business and personal reasons, only your business use is deductible.

4. Claim your marketing & advertising expenses 

How to reduce tax by claiming your marketing & advertising expenses? Every expense that is related to promoting your company can be classified as a business expense. Every time you pay Google or Instagram to promote your business, for example, it counts as a business expense that can be deducted from your profit before it’s taxed.

Other activities such as building a website or designing a logo are also part of it.

This list is not exhaustive and there are other expenses called “allowable expenses”, including; Interest and bank fees, salaries, insurance, professional fees and purchase of assets. Learn more about them at Revenue.ie.  

5. Set aside 30% of your profit

To avoid unpleasant surprises, we advise you to put 30% of your profit in a separate account and not to touch it. That way, when you pay your taxes, you already have an earmarked amount and know approximately what you need to pay.

This rule is one of the best ways to reduce self-employed tax in Ireland. So if you haven’t already, it’s time to begin committing some of your earnings to long-term planning.

6. Track all your expenses and keep receipts

To avoid unpleasant surprises, we advise you to put 30% of your profit in a separate account and not to touch it. That way, when you pay your taxes, you already have an earmarked amount and know approximately what you need to pay.

This rule also makes it easier for you to track your expenses because you only use the money in that account for business purposes. All your receipts will be in one place, and at tax time, all you’ll need to do is add them up.

7. Get organized

The most important thing you can do to pay less tax is to get organized So if you haven’t already, it’s time to begin committing some of your earnings to long-term planning.

8. Get expert help

While it’s possible to do your own taxes, it’s not always the best idea – especially if you’re self-employed in Ireland. The rules and regulations are always changing, and it can be hard to keep up. Instead, we recommend that you get help from a professional.

An accountant or tax specialist will be up-to-date on all the latest changes and can help you maximize your deductions. They will guide you better on how to pay less tax as self-employed. They can also help you plan for the future, so you’re not hit with a huge tax bill down the road.

9. Stay up to date

The best way to reduce your taxes in Ireland is to stay up to date on the latest changes. The government is always changing the rules, so it’s important to stay on top of things.

How can we help you save your income tax?

As financial advisors, we can help you set up a pension and find out more about how to save on tax in Ireland as a self-employed person. We will discuss with you the best ways to reduce the tax. You can get a free financial review by calling 01 853 2727

Plus, our business advisors can analyze your accounts and find strategies to reduce your income tax as a self-employed person. We will guide you through how to pay less tax as self-employed in Ireland.

Get in touch now and talk to one of our qualified financial advisors.

Get financial advice

Book a free consultation with us now. Our high-quality financial advice will help you become financially independent and save more money!

Debbie Cheevers

Debbie Cheevers

Qualified Financial Advisor

Debbie was born in Dublin and graduated from NCAD with a degree in Visual Communication. She brings a strong customer services background to Greenway.

Debbie qualified as APA in 2017 and a fully qualified financial advisor (QFA) in 2018.

She believes that product knowledge is key to helping customers make the right choices.

Free Call with Financial Advisor
Get a Financial Advisor To Review Your Personal Circumstances & Give You The Best Advice For Pensions, Insurance or a Financial Plan. Fill out the form below & one of our financial advisors will contact you within 24 hours!