I'm self employed, what tax/levies am I open to..

techguy

Hi There,

I've set up as self employed now and a few payments have started to come in.

Before things get out of hand i'm going to start keeping a record of all my income and expenses on a spreadsheet. I also plan on setting aside a certain amount of each payment to cover my end of year returns.

I'm just a little unsure about how much I should set aside and what rate of tax, prsi, levies I should expect to incur.

Is there anywhere I can find a laymans list of these and also how my expenses can be used to ofsset my tax bill. I've checked out the revenue briefly but I didn't understand too much of it tbh.

Cheers in advacne for any advice.

maddogcollins

Hi,

Its a good idea to leave some money aside as money comes in to help cover your tax liabilities.

As for the taxes you pay, this will all depend on your level of "taxable profits" at the end of the year. So anything from 20% up.

I have attached IT48- Starting your own Business from the revenue website. IT should help you out a bit in relation to what taxes you will be liable to.

Its also a good idea to keep a seperate bank account. I know you have mentioned you are keeping an excel sheet of Lodgements and expenses. Make sure you also keep receipts for all expenses.

Have you considered your liability to VAT also?If you are meeting the thresholds.

techguy

Thanks for that.

I've just had a quick scane through and it looks great. Where did you find it?

maddogcollins

http://www.revenue.ie/en/business/self-assessment.html

http://www.revenue.ie/en/tax/it/leaflets/it10.html

Revenue website is actually very helpful with items like this. May take a few searches to find the info but it normally is there. Some of it may be outdated but the basics are the same, just change rates etc..

techguy

Ok, I've looked through these links.. and the links on those pages.

I can't seem to find where it says the amount of tax free income. i.e. how much I can make before I have to pay 20%.

I have a feeling that it's around €10k for some reason but just need to be sure. What is there correct term for this tax free figure?

Cheers.

Clanket

techguy wrote: »

Ok, I've looked through these links.. and the links on those pages.

I can't seem to find where it says the amount of tax free income. i.e. how much I can make before I have to pay 20%. Everything above this is at 41%.

I have a feeling that it's around €10k for some reason but just need to be sure. What is there correct term for this tax free figure?

Cheers.

Im assuming you have set up as a sole trader.

In the Irish Revenue system, there is no tax free income amount. All your income up to a certain amount (standard rate band) is taxed at 20%.

However, there are tax credits. These are amounts that can be deducted from your tax liability. Effectivly, if you were to divide your tax credits by 0.2 you would get the amount you could earn tax free.

Everyones tax credits and standard rate bands are different. You should contact Revenue to find out yours.