Beginning PRSA Oct 2010 to offset 2009 Tax Liability

activegal

Hi everyone,

I am a self-employed sole-trader (39yrs old) and have no pension. I wanted to start a standard PRSA this month and offset my first (lump-sum) contribution against my final tax liability for 2009.

I over-estimated my preliminary liability for 2009 when making my tax return in Oct 2009 and as such, now only have a remaining balance of circa €500 to pay this Oct 31st (for 2009). Total tax due for 2009 is €4000, of which I have already paid €3500.

My question is:
If I start up my PRSA with a lump sum of say €2000, will I be credited in any way against the €3500 I have already paid?!?

i.e. will I receive a rebate? Or could I credit this against my 2010 preliminary tax?

My income this year, like many others, has been substantially reduced, so to pay 100% of 2009 tax liability for my 2010 preliminary tax would be over-paying the revenue also.

Hope this is not too confusing! I hope someone can help me, many thanks,

Activegal

SRASE

Based on information provided it looks like you pay all your tax at standard rate (20%).

Relief for pension contribution will be therefore at your standard rate. A payment of €2,000 will reduce your tax bill by (€2,000 * 20%) = €400