Best way to save on Income tax?

Mflynn07

Hi all. Starting a new job on Monday and will be receiving a good salary. However my question is this, what is the best way to save on income tax?
My wage will be considerably above the standard rate cut off point so incedently will be paying alot of tax.
I have heard that buying into some pension schemes can save on tax payments?? Also will i be entitled to rent allowance as i will be renting in the coming months..

Any help greatly appreciated and obviously i would like to hear legal alternatives for saving tax

Michael.

mikemac

You won't be getting rent allowance, not on a good salary paying 41% tax.
If you rent in private accomadation you can claim rent relief but it ain't much, maybe 350-400 per year.

There are many things you can claim back on but being a PAYE worker has less opportunites for this then being self-employed.

All the info is on www.revenue.ie

The main area to look at will be health and medical bills.
Rent relief/ mortgage interest relief
Union fees and do check out pension schemes but remember the value of many schemes have collapsed. Is it a good time to invest in a private pension scheme? Maybe or maybe not, do research first

Ginger83

mikemac wrote: »

You won't be getting rent allowance, not on a good salary paying 41% tax.
If you rent in private accomadation you can claim rent relief but it ain't much, maybe 350-400 per year.

There are many things you can claim back on but being a PAYE worker has less opportunites for this then being self-employed.

All the info is on www.revenue.ie

The main area to look at will be health and medical bills.
Rent relief/ mortgage interest relief
Union fees and do check out pension schemes but remember the value of many schemes have collapsed. Is it a good time to invest in a private pension scheme? Maybe or maybe not, do research first

+1

The maximum rent relief available for someone renting private accommodation is 400 euro. Its works out at 20 percent up to a maximum of 2000 euro rent paid.

Be aware though that if you have a mortgage and are renting a room say close for work reasons you are not entitled to claim rent relief if you are already claiming mortgage interest relief (TRS credits).

Also if you are paying waste service charges, bins etc you are entitled to claim 20 percent of up to 400 euro=80euro max provided your charges are paid up to date and on time.

Bluetonic

Paying into a pension is the most efficient way of paying less tax.

You'll find much more information on the pensions board website www.pensionsboard.ie

Ticktactoe

The tax relief on pensions such as PRSA, RAC etc is calculated in relation to your age and is expressed as a percentage of your gross income - this equalls the maximum amount that you can claim relief on per year i.e
Say you earn 50,000 p/a and your age is 27 then the maximum amount that you can claim relief on is 50,000 @ 15% = 7,500.
So if you are contributing up to 7500 of your income a year into a pension then you will get relief on this amount at the marginal rate of tax i.e in your case at 41%.
If you are paying more into a pension i.e say you are paying 10,000 a year then you will only receive relief on 7500 of it.
The 15% is calculated in accordance with your age.
Up to 30 = 15%
Up to 40 = 20%
Up to 50 = 25% etc. etc. etc

After 50 the percentages change but you can get this info on the Revenue website.
Hope I haven't confused you! Any questions let me know!