- 1. Receive tax-exempt income
You can receive tax-free earnings of up to:
– €18,000 p.a. if you are aged 65 or over. For a married couple one of whom is aged 65 or over, joint earnings less than €36,000 are exempt: s 188.
– €15,000 p.a. from caring for other people’s children in your home: s 216C.
– €12,000 p.a. from renting a room in your home: s 216A.
– €50,000 p.a. from creative writing, composing music, art and sculpture: s 195.
– €40,000 p.a. from letting farm land: s 664.
– €40,000 p.a. for three years from a business you set up having been previously unemployed: s 472AA.
- 2. Maximise your personal deductions and credits
If you are an employee you get an employment tax credit of €1,650 (s 472) and if you are self-employed you get an earned income credit of €950: s 472AB.
- You may be entitled to a deduction if you:
- – Work in certain foreign countries for not less than 30 days in the year (€35,000): s 823A.
– Have been specially assigned from abroad to work in Ireland (30% of income above €75,000): s 825C.
– Employ a carer to look after an incapacitated relative: s 467.
– Covenant some of your income to an elderly relative or incapacitated person: s 792.
– Pay maintenance to your ex-spouse: s 1025.
– Invest in an EIIS scheme (€150,000 p.a.): s 489.
– Avail of seed capital relief (€100,000 p.a.): s 493.
– Incur expenditure on a heritage home or garden: s 482.
- – You may be entitled to additional credits if you:
- – Are widowed (€1,650 in bereavement year: s 461, or a widowed parent in the first five years of bereavement (max €3,600): s 463.
– Aged 65 or more (€245): s 464.
– Pay private or postgraduate college fees: s 473A.
– Incur medical/dental expenses: s 469.
– Have an incapacitated child: s 465.
– Qualify for the help to buy scheme: s 477C.
– Improve your home through the home renovation incentive: s 477B.
– Your employer can give you tax-free benefits:
– Pension contributions.
– Bike and cycle gear (up to €1,000), travel to work ticket, mobile phone, home computer, home broadband: s 118.
– Annual gift card not exceeding €500: s 112B.
– Travel and subsistence in accordance with Revenue guidelines.
– A termination payment for loss of your job: s 201.
– Surrendered R & D credit: s 472D.
– Share options through the new Key Employee Engagement Programme – you pay CGT when you sell the shares: s 128F.
– Restricted shares: s 128D.
– Avoid the High Earner Restriction by keeping your income below €125,000.
– Avoid the domicile levy by keeping your income below €1,000,000.
- 3. Become self-employed
If you become your own boss, you can claim a deduction for:
– Expenditure incurred wholly and exclusively for the purposes of your business: s 81.
– Trading losses: s 381.
– Capital allowances on plant, machinery and equipment (12.5%): s 284.
– Capital allowances on an industrial premises (4%): s 272.
– Rental income is not the same as trading income and rental losses can only be offset against rental income.