Receipts for self employed

LemonAid

I'm nee to self employment so haven't done any tax returns yet.
I've been keeping all expenses receipts such as diesel tolls etc
Do 100% of the total price of these receipts go against your tax bill?how does it work?

Car99

You probably need an accountant .

LemonAid

Yeah but I could do it myself too but probably will get an accountant
But just wanted to know as I spend everything after the 20% deduction but wary of the 40% on earnings over the bracket,would be hoping receipts cover that but don't know how the receipts work....do they cover it 100% to the value?

namenotavailablE

As advised, safest to have an accountant go over the issues with you.

The basic idea is that valid business expenses are deducted from your business income. You are then taxed on the net profit remaining (although it's a bit more involved than that as you might be able to deduct 'capital allowances' for machinery/ car owned and used in the business, you might be contributing to a pension or paying income protection or a covenant etc).

You'd also need to take into account liability for PRSI and USC.

relax carry on

LemonAid wrote: »

Yeah but I could do it myself too but probably will get an accountant
But just wanted to know as I spend everything after the 20% deduction but wary of the 40% on earnings over the bracket,would be hoping receipts cover that but don't know how the receipts work....do they cover it 100% to the value?

You spend everything after the 20% deduction? What industry are you in? Are all your expenses wholely and exclusively directly related to your business? Arw there some realted to personal usage? Are you VAT registered?

As you are only starting off you need to speak with a competent accountant to arrange correct record keeping to allow a correct set of accounts to be drawn up for your returns.

Stratvs

A guess that the OP is either in construction/forestry related and RCT at 20% or prof services that come within PSWT at 20%. That deduction at 20% of the gross does provide a good contribution but as has been said, depending on expenses etc. it may or may not be sufficient to cover tax/prsi & usc.

As others have said, OP I would suggest a chat with an accountant to familiar yourself on all the ins and outs of your particular trade/profession and what is/isn't allowable.

Daxve

Section 81 is relevant in relation to deductions

http://www.irishstatutebook.ie/eli/1997/act/39/section/81/enacted/en/html

The main criteria being that to be an allowable deduction the the expense must have been wholly and exclusively incurred for the purposes of the trade.