Help me reduce Tax

T

Tax dumb

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Hi there

My fiance and I have both got good jobs with salaries of 50 and 60k. however we are clueless about tax and are paying almost 50k a year in Tax and Prsi. We seem to be working around the clock and apart from mortgage interest relief have no other exemption from tax. Can anyone help direct us to how we might reduce our huge tax by investments, luxuries etc. We both find that despite been on pretty good wages that once we consider our long working days, commute, and pay our mortgage, health insurance, dental billls etc we actually save very little. Can anyone please help us? Any advice on items we can write off against tax would be much appreciated - even down to massages, pysiotherapy...

Many thanks for reading.
 
Couple of tax saving ideas:

Health expenses

With the Med 1 [broken link removed] you can reclaim tax relief physiotherapy and dental treatments (note - only certain procedures) at the lower rate. Massages seem like a luxury - are they really necessary? You can't claim tax relief on this.

Commuting

Taxsaver tickets for train / DART. Will save tax at higher rate as well as PRSI. www.taxsaver.ie. This means virtually half price travel.

Bin charges

Can be reclaimed at the lower rate

In Ireland, we are taxed heavily on indirect tax (VAT, excise, etc). The only way to reduce these is to obviously look at your life style and see where you can cut back.
 
quinno said:
Commuting

Taxsaver tickets for train / DART. Will save tax at higher rate as well as PRSI. www.taxsaver.ie. This means virtually half price travel.
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This is a great way to save money if you are a commuter, but it is not available to everyone unfortunately, i.e. your employer has to sign up.

quinno said:
In Ireland, we are taxed heavily on indirect tax (VAT, excise, etc). The only way to reduce these is to obviously look at your life style and see where you can cut back.
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Especially luxuries!
 
Tax dumb said:
My fiance and I have both got good jobs with salaries of 50 and 60k. however we are clueless about tax and are paying almost 50k a year in Tax and Prsi.
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If this is the case then something sounds seriously awry here. Using [broken link removed] I calculate that a single person on €50K would probably pay about €10K tax and €2.6K PRSI while a single person on €60K would probably pay c. €14K tax and €3K PRSI. So your joint tax/PRSI bill should be c. €24K/€5.6K or €30K total.
 
If you are follwoing the good avice and still feel like you are willing to go further to save on your taxes then there are still a few tax incentive schemes that might interest you.

Section 23 etc shelter against rental income. There are a few others such are nursing homes or even section 482 relief. You could get a little over €30k in capital allownaces that will reduce you taxable income by around €18k.

These are investments and you would need to do a a lot of homework with a financial advisor before you even consider investing but depending on your financial situation it maybe something to you cold consider.

I am not saying that they are good investments or bad investments, I am just saying that they are out there and if you are desperate to reduce your taxes and the rest of your finacnes are in place, like pensions etc. then you might consider them.
 
First things first - find out if you are actually paying €50K in tax/PRSI and, if so, why because this sounds totally off the wall to me. Then make sure that you are claiming all the relevant tax credits/allowances such as those mentioned in the thread linked by clone1 above. Do this for the current tax year and, if necessary, for the previous 4 tax years (as far back as you can go).
 
if you both already have a PENSION, YOU SHOULD CONSIDER MAKING additional voluntary contribution(AVC), as this will help reduce your tax liability
 
my thoughts for what they are worth - Section 23 is only good if you have other rental property - it's an overpriced house otherwise.

Would agree with Clubman re the amount you are paying in tax - you really should have that checked out to ensure you are claiming everything you are entitled to.
 
Hi,

In a similar situatiuon myself. I had asked some people and they suggested getting as much as your salry as possible paid as expenses. E.g. allocate 20K of your salary for expenses.

Does anyone else avail of this?
 
Expenses would have to be vouched and I can't realy see where you could come up with expenses of €20 over and above genuine expenses that are re-imbursed.
 
John Smith26 said:
In a similar situatiuon myself. I had asked some people and they suggested getting as much as your salry as possible paid as expenses. E.g. allocate 20K of your salary for expenses.
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This does not magically reduce your tax bill unless it's done as part of an illegal tax evasion/fraud scam. As the previous poster says only expenses that have been made out of net income and vouched for can be reimbursed via salary with no tax/PRSI applying (since it has already been paid).
 
Look into joint assessment. You may be entitled to extra tax credits which could boost your net salary. This wont apply in every case but is definetely worth sitting down and checking out.
 
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