Happy (and a prosperous)
New Year to you all and welcome to our first newsletter of 2024.
The year brings with it a raft of changes and challenges. I hope you find the newsletter informative.
New Year checklist…
With a new year you should check the following as there may be an opportunity to reduce your tax or get a refund for 2023:
- If you got married in 2023, or are on maternity leave, etc is it beneficial to change your standard rate cut off to your husband/wife – it is possible to increase your take home pay by up to €1,800 by doing this. You must inform the Revenue of your wish to be jointly assessed by 31st March 2024 for the current year or if you miss this deadline, we can prepare a prior year review on your behalf.
- If either person’s earnings has changed, or a person has become unemployed or taken leave of absence, it may be worthwhile to transfer your tax credits to them?
- If you were unemployed or took leave of absence or unpaid leave in 2023, by doing a tax return you may be entitled to a tax refund.
- Should you do an income tax return now and claim tax relief on either nursing home expenses, employing a carer, EIIS investments, large medical or dental expenses (for example nursing home or carers wages qualifies for tax relief @40%, IVF qualifies for tax relief @20%).
- Anyone who rented in 2023 should claim the rent tax credit of €500 or €1,000 for a couple.
- Can I make a pension contribution now and claim tax relief against tax paid in 2023?
- Have any of my children reached the age of 16, are working in my business and need to be paid for the work they do? A person over 16 with full tax credits available of €3,750, could earn up to €18,750 p.a. and only pay minimal USC and PRSI.
If any of the above apply to your circumstances, please do not hesitate to get in touch with one of the team, and we will explore and explain how it may work for you.
Capital Gains Tax deadline
For those lucky enough to have made a Capital Gain in the month of December, this tax must be paid by 31st January. A surcharge of up to 10% is applied for late filings. The actual return need not be made until October/November 2024, however interest on late payments could accrue from the payment deadline date.
Refer a friend – receive a €250 voucher
A new year is a great time to change accountant. Our best clients come from existing client referrals. If you think a business you know would benefit from receiving a quotation from us, please contact myself, Colum, with a brief outline of their circumstances and contact details, and if they become a client we will give you a €250 voucher or make €250 donation to a charity of your choice.
Have you warehoused debt from Covid years?
I’m sorry to constantly bring this up, but for those who have not yet made a repayment agreement with Revenue for these taxes or discussed your situation with us, please contact us immediately. We are seeing a trend with Revenue of having less time to talk to us or giving us time to negotiate with them, so please do address this now. As I mentioned we achieved a 7 year repayment period for one client mid-2023, because they addressed their debt at that time.
Is it worth deferring claiming my state pension?
With effect from 1st January 2024, you now have the option of not immediately drawing down your state pension, and deferring the drawdown until the age of 70. The basic rate of contributory pension is €277.30.
Why would I defer?
Well in order to qualify for a contributory State Pension, a person must have 520 contributions – i.e. worked and paid PRSI for 10 years. Contributions made in other countries can be included. Therefore, it may suit a person who by age 66 was short – maybe 1 or 2 years, and thus by continuing to work for the missing weeks/years, could then qualify for a full state pension at say 68. A second reason is that if a person who does qualify for a full state pension at 66, decides to defer, they will be paid a higher pension form the time they do access it. Under the proposed flexible model, and based on current payment rates, the five weekly payment rates are as follows:
- Age 66 – €277.30 (current weekly rate)
- Age 67 – €290.30
- Age 68 – €304.80
- Age 69 – €320.30
- Age 70 – €337.20