As an employee, you’re not often thinking about what you can claim. When you earn the majority or all of your income from employment, your income tax and PRSI Contributions are taken automatically before you receive your pay. When you’re not in the habit of making a tax return, navigating the unfamiliar territory of claims can leave you feeling lost.
What counts as additional money outside of your employment? What happens when you’re working a side hustle? What if you’re already receiving a pension? Does being a Landlord factor in? What if you receive money from dividends or other incomes?
These are the situations many people find themselves in, so we get asked these kinds of questions a lot. We’ve got the basics down here, so you can feel confident you’re paying what you owe, and gaining what you’re entitled to.
Here it is in a nutshell.
You will need to complete a tax return if you want to do the following...
- Claim additional tax credits after year end - Tax credits are used to reduce the amount of tax you pay and depend on your personal circumstances e.g single, married etc Here’s a list of tax credits you may not know you’re eligible for.
- Claim additional reliefs or expenses - Extra reliefs include Flat rate expenses, Start your own business relief, medical expenses, college fees etc
- Declare additional income - If you receive extra taxable income outside of your employment, you will need to declare it on a tax return and pay the tax. So what is classed as taxable income? This isn’t exclusive to a second job - it includes income from rent, dividends, and some social welfare payments. Take a look at this list to see if your income is taxable.
- Obtain a Statement of Liability - This is the final review of your tax liability for the tax year, or previous tax years. This can be used as a proof of income statement for banks and financial institutions.
- Claim refunds of any tax and or USC overpaid - If you’ve overpaid Income Tax or Universal Social Charge, you must claim it back within four years of the overpayment.
Here’s how to go about completing your return
Check in to the Revenue Online service
You can complete your return by logging into MyAccount on the Revenue Online Service. If you don’t have a MyAccount you can easily register on ros.ie
Employers will have confirmed the payments for the last payroll in 2019 by the 15th January 2020, so you’ll now be able to review your income and the taxes paid.
You can now create a summary of pay and tax details which can be used as proof of income and tax paid for the purposes of a mortgage/loan application or for local authority use. Historically, you could have used your P60, but it was abolished in 2019!
Review your tax credits, reliefs and expenses
In MyAccount, you will be able to review your tax credits and add or remove as appropriate. The most common tax credits claimed are:
- Personal Tax credit (Single/Married/Widowed)
- Age Tax Credit (Can be claimed if you are aged 65 or over)
- Home Carers tax credit (If you are married/civil partnership, jointly assessed and one spouse is at home caring for one or more dependent persons)
- PAYE Credit – Can claim if you receive income that is taxable under PAYE system
- Earned Income Credit - Company Directors who own more than 15% of the company
Note: You can only claim relief on the cost of health expenses if you have paid for them.
You cannot claim for health expenses you’ve already received a refund for from an insurance policy, local authority or compensation. Medical expenses that can be claimed are doctors/consultants services, routine and maternity care, procedures recommended by a doctor, prescriptions, ambulance transport, nursing home expenses & non routine dental care
Next steps when you’re happy with your return
When you’re confident you have claimed the tax credits and expenses relevant to you, it’s time to submit the return.
Following your submission, you’ll receive an email from the Revenue to confirm you’re happy with your return. Once confirmed, you’ll receive a second email in the following weeks to say that the review is complete.
You’ll find your review in the unread documents in your MyAccount, and it’ll detail your tax position (i.e the tax refund due, or any liability). At this point, there’s no need to upload any supporting documentation, but there is a chance you may be chosen for a verification check [for example Revenue could look for you to send in medical receipts as back up to a medical expense claim], in which case the Revenue will contact you directly.
What if you’ve read this and it still feels daunting?
Hopefully you’re feeling a little more confident at this point. It may seem daunting to read about, but once you get into MyAccount, it’s fairly straightforward and stress free. However, we appreciate nothing is as stress-free as knowing it’s in the hands of experts! This isn’t new territory for us, so if you need any extra help - you know where to find us.