Tax Planning Tips for Contractors

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With the year end approaching we have compiled a checklist to ensure that you are availing of all the relevant tax opportunities before the end of the year:

Business Taxes

1. Review your accounts figures before your year end to plan any closing transactions to avail of tax opportunities, e.g.

• Consider bringing forward capital expenditure that qualifies for capital allowances – to get the allowances earlier e.g. purchase of computer equipment.
• If your accounting period end is 31 December any pension contribution your company intends to pay must be paid before 31 December to get a deduction in your accounts.

2. Claim home business expenses e.g. computer equipment/broadband.

3. Sell to your company any assets that you own personally, but use for business purposes (e.g. computer equipment).  The company can pay you free of tax

Directors

1. Make sure that all family members (spouse; children of working age) who work in the business are being paid a salary for the duties performed.

2. Tax Free benefits in kind (certain conditions apply):

• Pay directors and employees a tax free non-cash bonus of €500 per tax year.
• If you travel by public transport your company can buy a monthly or annual travel ticket.
• E working and working from home allowances.
• Job related training.
• Bike to work scheme: director eligible for scheme.
• One medical check- up per annum.

Pension Contributions

Employer Pension Contributions: employer contributions far exceed the limits that directors/employees can pay personally therefore consider a company pension scheme for directors/employees

Income Tax

You can earn up to €14,000 tax free if you let a room in your house (conditions apply)

4 Year Deadline

The 31 December is the four-year deadline for tax relief claims relating to the tax year 2013; for example, tax relief on:

• Qualifying medical and dental expenses
• Tuition fees
• PAYE refunds
• Home Carers Credit
• Year of marriage credit

Contact your OSK tax adviser Imelda Prendergast Director OSK on 01 439 4206 for more details or visit OSK Contracting or OSK Small Business Support .

 

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