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What to do with 100k business account funds

CPTM

Total profit this year will be about 100k. Kept there as rainy day money. Single director Ltd company with no debts. It's just myself. Total revenue was 185k of which I draw down an 85k salary. What could I do with the rest to make the most of it? Anyone know how much of a pension I can contribute?

Edit: if anyone has recommendations on where to go with this question, that would be appreciated too.

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BailMeOut

you need to talk to your accountant as they will know exactly what to do. I would assume you will pay 12.5% corp tax on that 100k so you need to look at ways to reduce this profit and this is what your tax accountant is paid to do so setup a meeting asap. Is this 2018 or 2019 as PRSA contribution deadline was 31st Oct.

CPTM

BailMeOut wrote: »

you need to talk to your accountant as they will know exactly what to do. I would assume you will pay 12.5% corp tax on that 100k so you need to look at ways to reduce this profit and this is what your tax accountant is paid to do so setup a meeting asap. Is this 2018 or 2019 as PRSA contribution deadline was 31st Oct.

This is 2019 accounts - I was stung with corporation tax for 2018 which is why I'm asking. My accountant didn't advise me on that. Is there a difference between tax accountant and my normal accountant who does the books? My accountant doesn't seem to want to actively advise me on anything. He knows everything when I go to confirm it, but doesn't proactively tell me which is a little disappointing.

BailMeOut

CPTM wrote: »

This is 2019 accounts - I was stung with corporation tax for 2018 which is why I'm asking. My accountant didn't advise me on that. Is there a difference between tax accountant and my normal accountant who does the books? My accountant doesn't seem to want to actively advise me on anything. He knows everything when I go to confirm it, but doesn't proactively tell me which is a little disappointing.

step 1, get a new accountanting firm that has experts in other areas so you can get good advice from a one stop shop.

Do you have any kids aged 16 or older you can employ?

CPTM

BailMeOut wrote: »

step 1, get a new accountanting firm that has experts in other areas so you can get good advice from a one stop shop.

Do you have any kids aged 16 or older you can employ?

Thanks for the response.. Yes I think I'll do that(finding a new accountancy firm).

No kids yet (one on the way!).. Any idea how much I can move into a pension fund?

BailMeOut

CPTM wrote: »

Thanks for the response.. Yes I think I'll do that(finding a new accountancy firm).

No kids yet (one on the way!).. Any idea how much I can move into a pension fund?

Congratulations!

Anywhere between 15 and 40% depending on age. Do you have a PRSA setup?

https://www.revenue.ie/en/jobs-and-pensions/pensions/tax-relief-for-pension-contributions.aspx

CPTM

BailMeOut wrote: »

Congratulations!

Anywhere between 15 and 40% depending on age. Do you have a PRSA setup?

https://www.revenue.ie/en/jobs-and-pensions/pensions/tax-relief-for-pension-contributions.aspx

I don't have PRSA setup.. But I will certainly speak to an accountant about that. I'm in the 30-39 year age bracket.. So am I correct in thinking that I can put aside 185k * 20% = 37k into a pension fund tax free?

Thanks so much for helping me get started on this. I really do appreciate it.

thegolfer

BailMeOut wrote: »

Congratulations!

Anywhere between 15 and 40% depending on age. Do you have a PRSA setup?

https://www.revenue.ie/en/jobs-and-pensions/pensions/tax-relief-for-pension-contributions.aspx

This in in a personal capacity only.

Contributions from a company are based on the salary of the director, and can operate on higher multiples and percentages.

adam88

BailMeOut wrote: »

step 1, get a new accountanting firm that has experts in other areas so you can get good advice from a one stop shop.

Do you have any kids aged 16 or older you can employ?

What’s the deal with having kids as employees. Just curious !

adam88

BailMeOut wrote: »

step 1, get a new accountanting firm that has experts in other areas so you can get good advice from a one stop shop.

Do you have any kids aged 16 or older you can employ?

What’s the deal with having kids as employees. Just curious !

thegolfer

adam88 wrote: »

What’s the deal with having kids as employees. Just curious !

Rather than pay your kids out of your own pocket, from after tax money, pay them through the company. Costs less ultimately.

However the employment must be a legitimate employment, they must work, and provide a service to the company. Revenue are cracking down on this type of thing, and have reversed P35 declarations that I am aware of, and treated the payment as a distribution to the parent\shareholder.

thegolfer

adam88 wrote: »

What’s the deal with having kids as employees. Just curious !