Self-employed? Here is how to reduce tax

Are you self-employed and filing your income tax return every year? 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, you should prepare in advance:

Here are 6 ways to cut your tax bill:

1. Invest in a self-employed pension

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 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

Another way to reduce your 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 cut your tax bill, you will need to deduct certain business expenses from your profits, which allows you to save tax.

2. Claim your home 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 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 

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 

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 the best way to avoid a large bill at the end of the tax year. 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 is the best way to avoid a large bill at the end of the tax year. So if you haven’t already, it’s time to begin committing some of your earnings to long-term planning.

How can we help you?

As financial advisors, we can help you set up a pension and find out more about how you will receive your tax relief. You can get a free financial review by calling 01 853 2727

Plus, our business advisors can analyze your accounts and find strategies to increase your income as a self-employed person.

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

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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.