Estimating tax payable on earnings from freelance work

D

Doireann

Guest
I am doing a bit of freelance work at the moment. I have registered for Self Assessment with Revenue but want to make provisions now for the tax that I will be paying come October.

I earn €29k per annum in my full-time job and will be paid €200 per month for my freelancing, of which I want to set aside an amount monthly to cover my tax libility.

Can anyone tell me approximately what % of the profit from my freelancing I should be setting aside to do this? 20%? 20% + a PRSI contribution [and how would I calculate that]?

Any advice appreciated, and thanks in advance.
 
Personally, at that level of income, I wouldn't have bothered with self-assessment.

You will be taxed on your additional income at your marginal rate, either 20% or 41%, depending on your personal tax-credits and cut-off point and you may be liable for PRSI and levies at 5%.

When you say profit, what sort of expenses will you have and do you know that these are allowable by the Revenue?

Did you speak to an accountant before registering for self-assessment?
 
Thanks for the info re: PRSI.

I don't know yet that I will have deductible expenses. As it stands, I will be calculating my tax liability on the whole of what I'm paid.

Mathepac - are you saying that I shouldn't bother paying tax on the freelance earnings, or is there some other option apart from self-assessment that I've missed? I haven't spoken with an accountant about my situation yet, will that really be necessary given the amounts involved?
 
Doireann said:
...
Mathepac - are you saying that I shouldn't bother paying tax on the freelance earnings, or is there some other option apart from self-assessment that I've missed? I haven't spoken with an accountant about my situation yet, will that really be necessary given the amounts involved?
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No I absolutely am not suggesting you hide the income, but you don't have to register for self assessment to declare extra income from which appropriate tax was not deducted.

Here's how you declare such income on your year end Form 12 :

mathepac said:
Either
1) Page 4 Paragraph 8 of Form 12, "Employments/Offices/Pensions not subject to PAYE deductions"
or
2) Page 5 Paragraph 11 of Form 12 "Fees Commissions etc. not included elsewhere".

Maybe some of the the tax gurus on here can say which specific entry to use.
AFAIK, either one will result in the Revenue deducting tax and maybe PRSI.
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Use the simple mechanism of your regular tax return and save your self hassle.
 
Ok that is great, thanks a mill mathepac. Looks like a much simpler route!
 
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