Top 50 tax-saving tips: income tax

28. Local property tax:

Ensure you have paid your local property tax so that you do not incur a surcharge on your income tax liability.

29. Preliminary tax:

Pay the correct amount of preliminary tax to ensure you do not pay interest. Would you consider moving to direct debit?

If so, you could pay 105% of the 2016 liability over the 2018 year.

30. Tax credits:

Ensure that you are availing of all the credits you are entitled to. A comprehensive list is available on www.revenue.ie

31. Four-year rule on reclaiming

Have you reclaimed all of your medical expenses since 2014? 2018 is the last year to claim unclaimed credits for 2014.

32. Add-backs for motor/web/telephone:

Have you revisited the percentage you are adding back for personal use? The higher the add-back, the higher your income liable to tax.

Review the personal add-back element.

33. Spouse and family wages:

Are your family working on the farm? Are they involved in the farm business?

Remember, a child living at home can earn €8,250 with no tax, PRSI or USC.

The child must make a commercial contribution to the farm, must be registered as an employee and an annual employer return must be made.

Are you availing of the dual income tax benefit? A dual-income couple can earn substantially more at the low rate than a single-income couple.

34. Stock relief:

Three bands of stock relief are now available: 25% – general, 50% – registered farm partnership and 100% – young trained farmer.

Ensure that you have profits available to avail of stock relief.

35. Income averaging:

Review the use of income averaging. If you opt out, you must review the previous four years. You must stay off averaging for four or five years after opting out so consider the effect of an increase in profits.

36. Milk quota:

Have you claimed the balancing charge on quota on the ceasing of quotas?

37. Succession credit:

A new succession credit of up to €5,000 is available for transfers of the farm for up to five years.

You must enter into a registered farm partnership and then transfer to a registered succession partnership to avail of the credit.

38. Capital allowances:

Motor cars are given a capital allowance based on their emissions.

A motor car in emission category A,B,C can avail of capital allowances up to a cost of €24,000 irrespective of the cost, eg car purchased for €12,000 – allowances available on €24,000.

Cars in higher-emissions categories have reduced allowances.

Ensure that you maximise the deduction.

39. Energy-efficient equipment:

Is the equipment you are purchasing listed on the seai website? If so, you can get a 100% write-off in year one – ie 2018. No benefit-in-kind applies to electrically powered vehicles.

40. Land leasing:

Revisit any con-acre agreements and encourage land leasing. Up to €40,000 is available to the lessor tax-free.

If you have older leases, would a review and update of the lease be worthwhile to avail of the higher allowances?

41. Pension:

Could the payment of pension against the farm income reduce your income tax liability? Consider the payment of same.

42. Forestry:

Income is now exempt from high earners’ restriction but still liable to PRSI and USC.

43. Home renovation scheme:

As either a home owner or landlord, you can get a tax credit of 13.5% up to a spend of €30,000. This is only available where all taxes are up to date and you use a registered contractor who has charged you vat at the reduced rate.

This scheme is due to cease on 31 December 2018.

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