IT Contractors: expenses

Aim2Please

Hi all, am considering the contracting option at the moment. I was wondering can anyone provide me with a list of legitimate business expenses that can be used to lessen my tax burden? :-) all replies greatly appreciated.

JP Mulvano

everything you think you can legitemitly make up an excuse for i.e. out drinking at the weekend = entertaining new clients. so on and so forth..

KTRIC

Do hookers give receipts these days ??

A friend wants to know for tax purposes.

CoolBoardr

Here's a list of some things you can claim on (taken from the people that manage my limited company):

- Public transport including Train/Taxi/Dart/Luas
- Initial purchase cost of business equipment for example computer, printer and associated items or transfer of equipment to the company
- Repairs and maintenance to business equipment
- Subscriptions to journals, magazines
- Membership to professional organisations
- Seminar and Conferences expenses
- Business mileage – a mileage rate is claimable for journey undertaken for business purposes (these will be the civil service rates as they apply to your car type)
- Accounting, Tax Agent and Tax Audit fees
- Telephones, Landline and Mobile phones
- Internet Costs, Installation and usage
- Consumables, Stationery, Postage
- Books and publications
- Self Education Courses
- Business Trips, a Business Trip Report required on this (purpose and travel diary essential)
- Home office expenses (rent, power, insurance)
- Relocation Expenses (If you are relocating to Ireland or within Ireland to take up a new position)
- Pension contributions

Aim2Please

thanks very much coolboardr

Just wondering about the Self Education Courses. Do these have to be IT related to qualify? I am looking to start a Diploma in HR management in the evenings. Not strictly IT related!

thx

is_that_so

Keep every receipt, an accountant will tell you what can be allowed. There will be no tax assessment until October 2007 for you but accountants like to encourage you to keep a bit aside for tax payments.

wheres me jumpa

Seems a silly question but could somebody explin IT contracting.

I thought it was just being on a contract as opposed to full time work. But from reading this and other threads on it im confused. Is it like setting up your own business? And then offering your services to companies? Or is it just like temping?

CoolBoardr

Aim2Please wrote:

thanks very much coolboardr

Just wondering about the Self Education Courses. Do these have to be IT related to qualify? I am looking to start a Diploma in HR management in the evenings. Not strictly IT related!

thx

From my understanding you can only claim on expenses that are directly related to the service you are providing (so an HR course wouldn't count if you are doing IT work) - don't quote me on that though, i'd check with an accountant.

The thing I find most useful is that I can write off (a percentage of) rent on my apartment, power, home internet, phones etc. as this is all part of my "home office".

wheres me jumpa - in order to contract you need to setup a limited company so effectively the company you are contracting to are paying your limited company who then pay you. One of the benefits of this is that you can write off certain business related expenses to lessen your tax.

eg. If I get paid $40,000 and my business related expenses total $10,000 - I can write off those expenses so I only get taxed $30,000 instead off the full $40,000.

There are companies that can set all this up for you and manage everything for a monthly fee or percentage of your earnings.

wheres me jumpa

CoolBoardr wrote:

From my understanding you can only claim on expenses that are directly related to the service you are providing (so an HR course wouldn't count if you are doing IT work) - don't quote me on that though, i'd check with an accountant.

The thing I find most useful is that I can write off (a percentage of) rent on my apartment, power, home internet, phones etc. as this is all part of my "home office".

wheres me jumpa - in order to contract you need to setup a limited company so effectively the company you are contracting to are paying your limited company who then pay you. One of the benefits of this is that you can write off certain business related expenses to lessen your tax.

eg. If I get paid $40,000 and my business related expenses total $10,000 - I can write off those expenses so I only get taxed $30,000 instead off the full $40,000.

There are companies that can set all this up for you and manage everything for a monthly fee or percentage of your earnings.

Thanks CoolBoardr

What companies offer this service? Are there any websites with info on it? Im not thinking of doing it just want to get some info on it.

CoolBoardr

Have a look at http://ire.cxcglobal.com/

ifah

I'm just setting up my limited company at present (after advice from my accountant) - the reason i'm going for ltd company is that I can employ my spouse and by paying her 23k per annum we can save an additional 5.5k tax per annum (based on Married 1 spouse working versus married both working cut off points).

the company i'm useing to set up the ltd co. is www.companysetup.ie - flat fee for doing the incorporation etc.