So here we are again, that time when everyone sees a looming tax bill at the end of October and is
digging around for eligible receipts to reduce the bill. Sometimes in the rush to complete the tax
return on time, valuable tax-saving opportunities are missed. So here are a few ways for you to
reduce your upcoming tax bill.
Tips to Reduce Your Upcoming Tax Bill
Claim for all eligible medical expenses
Even though relief for medical expenses can only be claimed back at the standard income tax rate of
20%, this one can really add up. Particularly if there is anyone in the house that is quite regularly
unwell or has an ongoing medical condition. It’s important to remember here that you can claim on
behalf of all your family members, and indeed in many cases where you are paying someone else’s
expenses – for example costs incurred in the care of an elderly parent.
Most expenses are covered including visits to your GP, consultant visits, prescriptions, and physio
visits etc. Standard dental costs are not covered, but if you are having major work done such as root
canal treatments or crowns, these are included. Check with your dentist, who will be able to guide
you as to what is covered.
The process is really simple and from our experience, the best way to manage this is to upload the
information and receipts on to the Revenue website throughout the year. This can be done in
tandem with health insurance claims, leaving you without a time-consuming exercise as you come
up to the tax deadline.
Pension contributions get tax relief at your marginal rate
If you are a higher rate tax payer, it really is hard to beat a pension contribution or an Additional
Voluntary Contribution to your company pension scheme. Pension contributions are one of the few
remaining routes to gaining tax relief at the higher rate of tax. Yes, it takes a payment to access the
tax relief, but this payment is simply fuelling your future lifestyle. Think of it as a tax efficient
investment in your own future. It’s important too to remember that there are several tax breaks
associated with pensions,
- Your contributions qualify for marginal (higher) rate tax relief within certain limits
- Your pension fund grows free of all taxes – no DIRT or Exit tax applies
- Take a portion of your fund tax-free at retirement, with other tax mitigating strategies available in relation to the balance.
And then there’s the rest…
And still there are many more reliefs and exemptions available, some of which may apply to you. So
make yourself aware of all of the reliefs available. Whether you’re working from home and can
qualify for the Remote Working Relief, you’ve kids in college, you are taking a training course or are
commuting on public transport to work, there are potential tax saving opportunities available to
you. If you need a new bicycle and can justify it for use at work, have a look at the Bike to Work
Scheme – this can be used for many electric bicycles too. A little bit of preparation and research just
might help you to unlock some significant tax savings.
Most of us recognise and accept the need to pay tax to run the country and are willing to pay our
share – but no more… Are you happy that you are not shouldering more than your fair share of the
tax burden?
Check out our other Savings Tips:
5 Tips to Minding Your Finances
Article first produced on PPS Monthly October 2022 Newsletter.