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Most tax efficient way for taking on a second income

  • 29-05-2020 6:06pm
    #1
    kala85
    Registered Users Posts: 1,879 ✭✭✭


    Hi folks,
    I am already employed as PAYE worker in the higher tax bracket.

    I have come up with an idea where by I could generate a second income.
    I wanted to find out the best most tax efficent way for dealing with this income. Most of my clients would be schools so I think that I would like to have everything above board.

    What do I do here ? Do I take in money and make a return at the end of the year or what happens? What can I offset against this income? or do I need to set myself up as a company?

    I would imagine I would turnover about 1000 to 2000e in this extra employment


Comments

  • #2
    Geuze
    Registered Users Posts: 13,046 ✭✭✭✭Geuze


    Simply add the net profits from this trade into your normal Form 12 tax return.

    Making sure to correctly deduct all the correct expenses from your gross revenue to arrive at the net profits.


    Note that this means your extra net profits will be taxed at your marginal income tax rate.

    You mention "tax efficient" - what do you mean by this?


  • #3
    kala85
    Registered Users Posts: 1,879 ✭✭✭kala85


    Just want to find out the best way of running it so that I don't overpay on tax.

    I don't mind paying tax and want everything above board.

    So the way to do it is to fill in the form 12. And what kind of expenses can I claim. I won't have many maybe my phone bill, Internet usage.small bit of travel.

    At the end of the year, then I just make a return is that it. How do I work out how much tax I owe.

    If I get offered work, would I be better off telling the employer to work via paye or send them an invoice and pay tax later.

    Is there a certain small amount of money I can earn without having to declare it like 2000 euro


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