Blog Homepage > Untangling Your Tax Return: Our Expert Shows How You Can Save
Many people are under the impression that filing a tax return is only for those who are self-employed, but there are a host of professions in which you are entitled to claims that can mean big savings at the end of the year. We asked one of our in-house tax experts about some of the ways you may be missing out on potential gains, and some tax-related pitfalls you should aim to avoid.
One of the main tax savings that many people are unaware of is the flat-rate expenses allowance. These are basically essential expenses that you incur while doing your job, or that are “directly related to the nature of the employee’s employment”. A good example is uniform costs. If, for example, you’re a nurse and you have to buy and launder your own uniform, you can claim a credit of €733 per year. This credit is worth €300 per year in your pocket if you are a nurse earning a salary of €40,000. Similar benefits apply to other uniformed employees like airline staff and shop assistants. Other professions such as teachers, lecturers, architects & surveyors employed by civil service/local authorities, engineers, plumbers, and builders also qualify for flat-rate expenses.
With regard to travel expenses incurred while working, you are not generally entitled to claim relief for expenses arising from your usual travel to and from work. However, depending on the nature of your duties and if you are required to travel as part of your work, you may be entitled to claim these expenses as either flat rate or vouched expenses.
Medical and Dental Care
For medical costs, you are entitled to 20% tax relief on expenditure incurred. This includes doctors’ and consultants’ fees, diagnostic procedures, drugs prescribed by a doctor, and treatments prescribed by a doctor, e.g. physiotherapy, acupuncture, etc. You must have receipts for the procedures or medicines you are claiming for and they must be kept for 6 years. Relief is available on prescription expenses up to a maximum of €144 a month for 2014, again at 20%. People who suffer from diabetes or coeliac disease are also entitled to claim expenses for food products that they have been specifically advised by their doctor to purchase. As for dental expenses, the main takeaway here is that you can’t claim relief for routine dental procedures such as fillings and extractions, but you can for cosmetic treatments like veneers, crowns, and most orthodontic work.
This benefit is due to be completely phased out by 2017 but if you were already renting on 7 December 2010, you are still eligible to claim for it. If you were not renting on that date and you subsequently entered into a rental agreement, you will not be able to claim tax relief on your rent. However, if you were renting before 7 December 2010 you will continue to qualify for this relief even if you enter a different rental agreement after that date.
The Revenue has been taking a firmer approach to undeclared additional income from PAYE workers in recent years. As a teacher, you wouldn’t normally be expected to file a tax return, however, if you have additional sources of incomes other than your main salary such as grinds, you should declare this. Other things to keep in mind are summer camp work, music lessons, and income from your spouse if they are self-employed. As a PAYE worker, you are generally not obliged to fill out a Form 12, however if you do have additional income, you are obliged to return same.
The tax requirement for landlords and people renting out rooms or their homes has been highlighted a lot in the news recently, particularly in relation to “Airbnb”. Last month Airbnb began emailing all its Irish hosts to tell them that they would be informing Revenue of all their rental income accrued from 1st May 2014 to 31st December 2014. Revenue also recently ruled that the “Rent a Room” tax relief scheme does not apply to Airbnb hosts, although the company has challenged this on the basis of a similar rule in the UK, and the situation may change in the future. For now, we advise all landlords and those renting out rooms to be diligent with their records. All receipts should be kept for a period of 6 years, and un-receipted expenditure is not allowable for tax relief.
If you haven’t been claiming for these reliefs or credits on an annual basis then you could be due back a substantial refund as you can claim for a period of up to 4 years. In fact, the average refund for our customers last year was €1,200!*
*Source: Midas statistics 2014.
Midas is a tax based service and not a regulated financial product. Cornmarket Retail Trading Ltd. is a wholly-owned subsidiary of Cornmarket Group Financial Services Ltd. Telephone calls may be recorded for quality control and training purposes.