Money Matters Newsletter - April 2011

NEY M MATTERS

Denis Naughten

Does the tax man owe you money?

Many taxpayers, especially PAYE taxpayers, fail to claim relief on expenses which they have incurred in the last 4 years and which are eligible for tax relief.

In the last 4 years have you: ● Paid waste collection charges? ● Visited the doctor more than once or twice in the year? ● Bought prescription medicine on a regular basis? ● Lived in private rented accommodation? ● Had non-routine dental work done? ● Paid college tuition fees? ● Employed a home-help? ● Been unemployed since January 1st last?

If the answer is yes to any of the above then you could be due a refund.

For more information see www.revenue.ie and search for tax credits and reliefs.

Some other schemes which taxpayers fail to claim include: ■ Health Insurance While taxpayers receive tax relief on medical insurance through their insurance company many are unaware that a similar relief applies to dental insurance for non-routine dental relief. Relief is also available for permanent health insurance premiums where the scheme provides a regular income in the event of sickness or disability.

■ Maternity Benefit Women who hand over their State maternity benefit to their employer and continue to receive their full taxable salary may be entitled to a refund on tax, PRSI and the health levy in situations where the employer does not take into account the fact that their maternity benefit is tax free.

■ Trade Union Subscriptions This is an annual flat-rate tax relief. There is no form to fill out and the tax credit can be claimed by calling your regional Revenue Offices.

■ Home Carers The Home Caring Spouse Credit is available for married couples where one spouse (the ‘home carer’) works in the home caring for one or more dependent persons, subject to conditions.

Dependent Relative Credit is claimable if you support a widowed parent or incapacitated relative whose income does not exceed the contributory state pension.

■ Childminding relief Where a person minds up to three children in their own home, no tax will be payable on the childminding earnings up to a limit of €15,000.

■ Flat rate expenses One little known source of tax relief that is available to many PAYE workers is what is termed ‘flat rate expenses’. These are standard expense deductions that amount to an estimate of the amount of expenditure incurred in these occupations that isn’t covered by employers.

For example a teacher can claim a deduction of €518 while bar staff are entitled to a deduction of €93, a nurse can claim up to €733, a part-time fireman €407, a carpenter €220 and a journalist up to €381. A full list of occupations is available on the Revenue website at www.revenue.ie

Tax Credits A tax credit reduces the tax you pay on your income. Some credits are fixed, like the single or married person’s tax credit, while others depend on the amount you spend such as rent or college tuition.

Your tax credits are subtracted from your tax liability to give you the tax that you are liable to pay.

The most common tax credits are: ● ● ● ● ● ● ● ●

Single/married credits Widowed and one-parent family credit PAYE credit Age-related credit Dependent relative Incapacitated child credit Tuition fees (excluding registration fees) Work related expenses

FURTHER INFORMATION If you are a PAYE customer and require further information from Revenue please phone 1890 77 74 25 or log on to www.revenue.ie You can also contact your local Citizens Information Centre: ▲ Athlone (St. Mary’s Square) 090-6478851 ▲ Boyle (St. Patrick Street) 079-9662986 ▲ Roscommon (Castle Street) 090 6627922 ▲

dnaughten@oir.ie

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Medical Expenses Tax relief on medical expenses is one of the most under-utilised benefits available. This applies to medical expenses that have not been reimbursed by a private health insurer.

■ The main health expenses on

which relief can be claimed are: -

GP costs Prescription drugs & medicines Hearing aids Home nursing Maternity care The supply, maintenance & repair of medical equipment used on a advice of a practitioner Physiotherapy or similar prescribed treatment Expenses of kidney patients Non-routine dental work Psychological assessment & speech therapy for children

Get the best telephone deals The communications regulator ComReg runs an interactive website callcosts. ie that can help identify the best and cheapest landline and mobile services based on your particular usage patterns and preferences. It only takes a few minutes and can highlight options that could yield significant savings. Check your phone bill to see if you are paying a monthly handset rental charge. If you are – call up your operator and cancel it.

Low pay?

Family Income Supplement (FIS) is a weekly payment for families, including

one parent families, at work on low pay.

Any person with one child who is on a low income may be eligible and the limit increases for each child. For more information on Family Income Supplement text the word ‘FIS’ along with your name and address to 086 1708800.

Unemployed?

If you paid tax since January 1st last and are now unemployed, you may be entitled to a tax refund. You should complete form P50 which can be obtained from the Revenue Commissioners and submit with your P45 parts 2&3. Also if you paid tax in the year in which you were made redundant, you may be in a position to claim tax back in stages during the year.

Further information is available on the website www.losingyourjob.ie.

Make your money go further You can make significant savings on car, health and house insurance. Make sure to check the cover you have. Don’t overvalue your car, house or contents. Your rebuilding costs for your home should reflect the downward trend in building costs. Can you live with a higher excess, the amount of a claim that isn’t covered, on your home, health or car insurance?

Do you need cover for accidental damage to household items?

An independent price comparison system has been made available by the State’s Health Insurance Authority at www. hia.ie For motor insurance check out www.itsyourmoney.ie and click on cost comparisons.

Starting a business Under the Seed Capital Investment Scheme someone who has left a PAYE job to set up on their own may claim back all of the income tax they paid during the previous six years.

However this is only available on certain types of ventures including: manufacturing, internationally traded services or services capable of becoming internationally traded, research and development, the cultivation of mushrooms, micro or greenhouse cultivation, some recycling ventures and certain tourism ventures approved by Failte Ireland and which it can be shown are aimed at attracting visitors from abroad.

The basic requirement is that the would-be entrepreneur is setting up a new business having been employed and he or she has to take up full-time employment in the new business. The incentive is not available to someone who is self-employed or running his or her own business.

Employ your spouse Two income families can earn far more before they fall into the higher rate of tax and higher levies where one spouse who runs their own business employs the other. The reality is that both spouses usually contribute to the running of a business so by splitting the income they can maximise the amount of income tax paid at the lower rate.

This could also apply to rental or other income and it does not cause tax complications as asset transfers between spouses are exempt from stamp duty, capital gains tax and gift tax.

Disclaimer: While every effort has been made to ensure that the content of this leaflet is accurate anyone seeking a tax refund or advice on tax matters should contact Revenue directly. It should be noted that there is a four year time limit for claiming tax credits.

DENIS NAUGHTEN’S LOCAL CLINICS Denis is available every week at his constituency offices as follows: Abbey Street Roscommon Town Tel: 090 6627557

Ardkeenan, Drum Co. Roscommon Tel: 090 6437324

0612

Mob: 086 1708800 Other locations available by appointment.

dnaughten@oir.ie

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