Demystifying the Tax Return Process: Get ahead of the rest and complete your return now!

Who needs to complete an income tax return?

Not everyone in Ireland is obligated to file a tax return. If you operate as self-employed, as a director of a company, are a landlord, or have additional sources of income beyond full-time employment, you will need to file an income tax return. 

Another factor to consider is the time you received the non-PAYE income, such as by operating as a company director or being self-employed. For tax returns submitted in 2024, the income declared will actually relate to the previous year of 2023. This means if you operated as a company director or were self-employed for any duration of time in the 2023 tax year (January to December), you will need to declare and complete a tax return in 2024. 

When is the deadline to submit your income tax return? 

In Ireland, the filing deadline for income tax returns is October 31st of the year following the tax year. 

For example, if you operated as a director of a company from anytime between January to December in 2023, your income from the period will need to be declared by 31st of October, 2024. It's also important to note that if there is any potential liability due to Revenue, payment is typically due at the same time as the filing deadline. Because of this, we highly suggest starting the process as early as possible, if not now! 

Why should I complete my Income Tax Return checklist now? 

Starting the income tax return process early offers numerous benefits, including your financial wellbeing and peace of mind! Here’s some of the reasons we suggest starting now 

Meet the Deadline and Avoid Penalties - Perhaps the most crucial reason to start early is to ensure compliance with the income tax return deadline. Failing to file on time can result in penalties and unnecessary complications. By initiating the process well in advance, you have a buffer period to address any unforeseen circumstances. 

Gathering the essential information - Commencing the tax return process early gives you ample time to gather all the relevant details and documentation required for accurate filing. 

Avoid Last-Minute Stress and Delays - Leaving your income tax returns until the final deadline can lead to unnecessary stress. The tax deadline is a busy period, by starting now you allow yourself sufficient time to address any complexities or seek any needed guidance, in a timely manner, reducing any last minute running around! 

Plan Ahead for Tax Owed or Refunds – Filing your income tax return early provides you with a clear understanding of your tax liability or potential refund. In the worst-case scenario of owing taxes due to underpayment throughout the year, early preparation allows you more time and options to spread the repayments, avoiding financial strain. On the other hand, if you expect a refund, filing early enables you to receive it sooner, putting money back into your pocket. 

How do I begin the process? 

Once you're ready to complete your Income Tax Return, you can access the checklist in the Icon Accounting App or on the iConnect Portal. Our Income tax team will take it from here! We will send you a draft income tax computation to review and approve, and once done, we will proceed to processing your income tax return on your behalf. 

What allowances can I claim in my Income Tax Return? 

Your income tax return can be used to declare tax allowances, which can help in reducing your tax burden, but it’s important to familiarize yourself with the Irish tax system and understanding your eligibility and the associated requirements is crucial. At Icon Accounting, we strive to make this process as easy as possible for our clients. We have dedicated tax experts who can organise consultations to ensure you receive all the tax benefits you are entitled to. In addition, we offer the Income Tax Return Checklist Guide, which you can download from our knowledge base on the Icon Accounting app. This guide provides a comprehensive breakdown of the different schemes and requirements to claim. 

Among the various credits available, here’s a summary of some of the most common credits we see. 

Most Commonly claimed Tax Credits 

Medical expenses  

Reimbursement: You can claim 20% back on medical expenses, except for nursing home fees, which are reimbursed at your highest tax rate if eligible. 

Qualified Practitioners: To qualify for relief, healthcare must be provided or advised by a registered practitioner, such as a doctor or dentist registered with the Medical Council of Ireland. For physiotherapy, chiropractic, podiatry, or chiropody, you must be advised by your GP. 

Prescription Costs: You can claim up to €960; costs above this can be claimed under the drug subsidy scheme. Apply here. 

Dental Care: Only non-routine dental care qualifies for relief. You must provide a Med 2 form signed by your dentist. 

Special Diets: For conditions like Coeliac or Diabetes, provide Revenue with a letter from your doctor detailing the medical condition and dietary requirements. Submit this letter through MyEnquiries in myAccount. 

Cosmetic Procedures: These are not eligible for relief. 

Healthcare Abroad: Treatment abroad qualifies if the practitioner is registered in their country. Travel and accommodation costs are covered only if the care is not available in Ireland. 

Mortgage Interest Relief   

Eligibility: Temporary relief is available if your mortgage interest costs in 2023 exceed those in 2022. The mortgage must be on a qualifying property with a balance between €80,000 and €500,000 as of 31/12/2022. 

Relief Amount: Relief is capped at €6,250 per property at the standard tax rate of 20%, translating to a maximum tax credit of €1,250. 

Guidelines: Check qualifying conditions here. 

Rent Tax Credit  

Eligibility: For individuals paying rent for private residency, student accommodation, or 'rent-a-room' arrangements. 

Credit Amount: 

2022 and 2023: Up to €500 for individuals, €1,000 for jointly assessed couples. 

2024 and 2025: Up to €750 for individuals, €1,500 for jointly assessed couples. 

Registration: Tenancies must generally be registered with the Residential Tenancies Board (RTB), including student accommodation. If not registered, you are not eligible. 

Exemptions: The credit is not available for ‘rent-a-room’ or ‘digs’ arrangements if you are related to the landlord. 

Details: For more information, review the Revenue guidelines.

Remote Working Relief: You can claim 30% of the cost of electricity, heat and broadband (apportioned based on the number of days worked from home over the year) 

College Fees Tax Credit: Only applicable for qualifying courses listed on Revenue.ie. 

What about my pension and health insurance?  

You only need to add these to your tax return if relief is not given through payroll, i.e. the premiums are paid directly by you to the pension provider.  If the premiums are deducted through your payroll, the taxable payroll figure that will show in your tax return is taken from your Employment details summary, which shows your gross pay less your pension deductions.   

To summarize, filing your tax return in Ireland may seem complex, and there are various factors to consider when it comes to documentation, reviewing the past year, and understanding eligible credits. But that’s why we are here! Income Tax Returns are part of the fully managed service offered by Icon Accounting. We have an expert tax team that can guide you through the process at any stage of your contracting journey and take care of the nitty-gritty tasks. Remember, seeking professional advice when needed can provide further peace of mind and optimize your tax position.

If you would like to complete your Income Tax Return as a client of Icon Accounting, you can access the checklist in the Icon Accounting App or on the iConnect Portal. Alternatively, reach out to your account manager directly or on 01-8077106 or info@iconaccounting.ie, who will be happy to assist you!