I recently started a temporary contract position in which I will be self employed.
I do not need to set up a company, just look after my own tax returns. As I have only ever been a PAYE employee since I started working, I am looking for some advice on this reaying tax.
Can anyone recommend a good online tax calculator so I can work out how much tax I owe? I have also been told that certain expenses related to my job are tax deductable. Can anyone advise on this too? Thanks for your help.
As you will be self-employed you will need to produce a set of accounts, to included all tax deductable expenses. This will vary depending on the nature of your work, and you will therefore not find an online calculator, as you firstly need to calculate your taxable profit.
When you calculate your taxable profit you can then use some calculators, but note that you will not be entitled to the PAYE tax credit against income from self-employment, and you will have to pay PRSI at 3% for 2010 and levies as applicable.
As stated by Domo, you need a good accountant to help you get tax relief on everything that you're entitled to. I am self-employed and have since my 1st payday put 25% in a separate bank a/c for the tax man so I wouldn't be tempted to spend it
My expenses are usually quite high so I've found that 25% is sufficient so far. Given the changes in todays budget it may be better to put away 27-30% and have some left over rather than a big shock.
Next year - August/September, take you paperwork to an accountant and they'll prepare your tax return. You will be expected to pay the tax for money earned in 2010 and a pro-rata amount on account for 2011 earnings.
Keep every receipt even for little things like biros, highlighters etc.
aying tax.