As the deadline for filing your self-assessment tax return is incoming, the NFRN have compiled a guide to aid you through this stressful time.
What is the deadline?
This year, the deadline for returning income tax online is Wednesday 17 November, 2021.
Ensure that on or before this date, you have:
- Paid all preliminary tax charges for 2021
- Filed your 2020 self-assessment income tax return (such as Form 11, this deadline was October 31 2021)
- Paid income tax balance from 2020.
If tax is filed late, a penalty will be added to the tax due.
Who needs to file an income tax return?
Income tax returns must be completed by self-employed people.
Register for the Revenue Online Service (ROS)
ROS is used to view and manage business taxes. By registering online, you can make use of the online extension.
When using ROS, tax paid will be calculated automatically based on the information provided during the self-assessment.
Compile your financial records
All self-employed people should separate all business and personal finances. In order to file your income tax return, ensure you have the following documents:
- Business receipts (to back-up transactions and claim tax-deductible expenses)
- Any sales invoices
- Bank statements
This bookkeeping process is important to ensure the correct amount of tax is paid. By keeping all books up to date, you’re helping to minimise your tax bill as much as possible.
Calculate Preliminary Tax (PT)
PT is your estimate of Income Tax, Pay Related Social Insurance (PRSI) and Universal Social Charge (USC) that you expect to pay for a tax year.
You must make sure you do not underpay your PT to avoid being charged interest. The amount of PT must be equal to, or more than, the lowest amount of the following:
- 90 per cent of the tax due for that tax year
- 100 per cent of tax due for the immediately previous tax year
- 105 per cent of the tax due for the tax year proceeding the immediately previous tax year, often called the pre-preceding year.
* This option is only applicable when paid by direct debit and does not apply if the tax due for the pre-proceeding year was nil.
For more information, visit: www.revenue.ie/en/self-assessment-and-self-employment/index.aspx
Related Articles
