10 ways to reduce your tax liability

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1. Maximise Business Expenses

Ensure you claim all allowable business expenses, including rent, utilities, office supplies, travel, and professional fees. Keep detailed records and receipts.

2. Claim Capital Allowances

You can claim capital allowances on qualifying business assets (e.g., computers, machinery, vehicles). The standard rate is 12.5% per year over 8 years.

3. Contribute to a Pension

Contributions to an approved pension scheme (such as a PRSA or personal pension) are tax-deductible, reducing your taxable income.

4. Use the Earned Income Tax Credit

As a sole trader, you can claim the Earned Income Credit (currently up to €1,775) to reduce your final tax bill.

5. Split Income with a Spouse

If your spouse works in the business, paying them a reasonable salary can reduce your overall tax liability by using their tax bands and credits.

6. Avail of the Start-Up Relief (SURE)

If you've recently set up your business, you may be eligible for the Start-Up Refunds for Entrepreneurs (SURE), allowing a refund of income tax paid in previous years.

7. Consider Incorporation

If your profits are growing, consider transitioning to a limited company, which may offer tax benefits, such as a 12.5% corporate tax rate and better pension planning options.

8. Claim Home Office Expenses

If you work from home, you can claim a proportion of household expenses (electricity, heating, internet) related to business use.

9. Make Use of Flat-Rate Expenses

Certain professions qualify for flat-rate expense deductions, reducing taxable income without needing receipts.

10. Use Losses Efficiently

If you make a loss, you can offset it against other income (such as rental income) or carry it forward to reduce future tax bills.