A must read from the seasoned tax experts at Ormsby & Rhodes as we approach Income Tax year-end

One of the most important tasks for Sole Traders and self-assessed taxpayers in Ireland is preparing and filing your income tax returns. Navigating through the process might seem daunting, but with the right approach and expertise, it can be manageable and even beneficial to you and your business. Here’s a comprehensive guide to help you prepare for your income tax returns as a sole trader or self-assessed taxpayer, along with a breakdown of allowable expenses you can submit.

Review financial records:

Go back over your financial records for the year, verifying income and expenses and checking invoices and receipts, both business and personal. This will not only help you accurately report your income but also enable you to claim applicable tax deductions and credits. Consider leveraging a cloud-based system aimed at Sole Traders and SMEs, if not doing so already, that will enable you to produce reports for your Tax advisor and easily identify outstanding invoices. 

Understand Your Tax Obligations:

Sole Traders, self-assessed taxpayers, and Company Directors, in Ireland are subject to various tax obligations, including but not limited to Income Tax, Pay-Related Social Insurance (PRSI), and Universal Social Charge (USC). Understanding these tax liabilities is vital to plan your finances effectively. Experts, such as our taxation team at Ormsby & Rhodes, can assist you in navigating your obligations.

Register for Self-Assessment

Remember, if you are new to being self-employed, you must register for self-assessment. This involves obtaining a Personal Public Service (PPS) number and registering for the Revenue Online Service (ROS). Self-assessment allows you to report your income and calculate your taxes accurately. 

Be aware of key dates

The Pay and File deadline for the 2023 Income Tax Return (Form 11) is 31^st October or 14^th November 2024 for ROS submissions. For Ormsby & Rhodes clients, if your information is not currently with our tax team, we would ask that you submit all relevant information asap. 

Know your allowable expenses, for example:

• Office Expenses: Rent, utilities, and office supplies.
• Business Travel Costs: Fuel, public transportation, and accommodation for business-related trips. Note: this does not include travel to and from home to the office.
• Marketing and Advertising: Costs related to promoting your business.
• Professional Fees: Fees paid to professionals like accountants or consultants.
• Insurance: Business insurance premiums.
• Equipment and Tools: The cost of purchasing or repairing equipment essential for your business.
• Training and Development: Costs for courses or training relevant to your business.
• Bank Charges: Fees associated with business bank accounts.
• Motor Expenses: If you use your personal vehicle for business purposes.
• Business subscriptions and Memberships: Cost of professional memberships, trade publications, and subscriptions relevant to their business.
• Phone and Internet: Business-related mobile phone costs and home WiFi services are allowable.
• Home Office Expenses: If a Sole Trader operates a home office for business purposes, they may claim a portion of certain household expenses, such as utility bills.
• Pension contributions: Contributions made to an approved pension scheme may be eligible for tax relief, subject to certain limits.
• Health Expenses: Include personal medical expenses from throughout the year. 

It’s important to note that the above expenses must be genuinely incurred for business purposes (except for your personal medical expenses) and supported by receipts and invoices. Additionally, some expenses may be subject to specific restrictions or limitations, therefore seeking professional advice from the taxation experts at Ormsby & Rhodes is recommended to ensure compliance with the tax regulations and maximise allowable deductions.

At Ormsby & Rhode,  we are here to support you in making the most of your Sole Trader / self-assessed tax return and keeping your business on the path to success.

Connect with our team at info@ormsby-rhodes.ie

Note: The contents of this article will be valuable to Company Proprietary Directors, individuals with rental income, investment income, and any other non-PAYE income sources. It is always recommended to seek specialist tax advice for income tax-related matters, to ensure you remain compliant and maximise available tax credits.