Claim now and tax man can help you defray costs of property levy
It's only a matter of weeks before we start receiving letters in the post telling us how much the tax man thinks our homes are worth – and how much of the hated property tax we'll have to cough up this year.
Most homeowners will be a few hundred euro worse off this year as result – and as the first property tax we pay will be for half the year rather than the full year, we face a double whammy in 2014.
If you own any investment properties, you'll have to pay the €200 non principal private residence tax – as well as the property tax – on those properties.
As the property tax comes on top of the six austerity budgets that have hit this country, there has never been a better time to make sure you're getting back whatever tax reliefs and allowances you're entitled to.
If you have young kids or are grappling with a health condition, you're probably in the doctor's surgery round the clock – and nursing massive medical bills as a result.
You can however claim back a fifth of your medical bills in tax relief including doctors' and consultants' fees, drugs or medicine prescribed by your doctor, speech and language therapy, physiotherapy, laser eye surgery and IVF.
Even expenses that arise from a dietary condition can qualify for tax relief. If you must eat gluten-free foods because you're a coeliac or diabetic, you should be able to claim back a fifth of the cost of that food – as long as you get a letter from your doctor confirming that you have the condition and are buying that food on your doctor's advice.
If you're paying through the nose in dental fees thanks to your sweet tooth, you can get tax back on certain dental bills, including crowns and root canal treatment. Not all dental bills qualify for tax relief however – if you get a tooth out or a filling for example, you won't get any tax back.
The tax relief isn't always restricted to medical expenses. If your child is suffering from a life-threatening illness, you should also be able to claim tax relief on certain expenses arising from that illness, including transport to and from hospital.
If your medical bills for this year run into the thousands, your tax rebate should easily cover the cost of this year's property tax.
If your bills for last year came to €1,235 for example, you're entitled to €247 tax back – equivalent to the property tax due this year on a €300,000 house, according to Cathal Maxell, who runs the tax-saving website, paylesstax.ie.
If you've never claimed tax relief on medical expenses, get moving – you can claim back tax on expenses paid over the last four years.
Another thing which could easily put a few bob in your back pocket to cover the upcoming property tax is the flat rate allowance you can get for doing your job, according to Maxwell.
The allowance – known as a flat-rate employment expense – can be worth a few grand a year, depending on your job.
For instance, if you work in an orchestra, you can get an annual allowance of €2,476 – as long as it is either the RTE Concert Orchestra or the RTE National Symphony Orchestra.
Miners can get an annual allowance of up to €1,312.
If you're one of those nurses who recently signed up to lower pay under the graduate nurse recruitment scheme, be sure to claim your annual allowance as it could be worth as much as €733.
If you're a hospital consultant on €250,000 a year, you can also get an annual allowance of €695.
Other public sector employees such as college lecturers are entitled to €518 a year and full-time teachers can get €518 a year (not to mention their three months paid holidays in summer and long breaks at Christmas and Easter).
In the private sector however, many workers are only entitled to annual allowances of less than €100 – kitchen porters, for example, get only a dismal €21 allowance. The allowances are only given for expenses that arise from doing your job, such as tools and uniforms.
You can still get tax relief for renting a property – or renting out your home.
If you've been renting for the last two-and-a-quarter years, be careful about renting elsewhere however – otherwise you could lose out on any tax relief you're entitled to on the rent you pay. As long as you're renting the same place today as you did on or before December 7, 2010, you can get tax back on your rent. If you're single, you can get between €200 and €400 in tax back on your rent this year, depending on your age and the amount of rent paid this year. As the government is phasing out rent relief, it will no longer be available after 2017.
If you're not renting, but are a homeowner with a spare room who is stuck for cash, you could rent out a room in your home for up to €10,000 a year – without having to pay tax on the rent earned.
This tax break, which is available under the rent-a-room scheme, is valuable. If you earn rent of €10,000 outside the rent-a-room scheme, your tax bill on the €10,000 could easily be €4,800.
WORKING OUTSIDE THE OFFICE
If you have to work outside of the office, such as travelling for business appointments or meeting clients, you might be entitled to tax-free subsistence payments to cover the cost of meals and other expenses which arise.
If you must work out of the office for between five and ten hours a day, you're usually entitled to subsistence of €13.71 a day; if out of the office for more than ten hours a day, you're entitled to subsistence of €33.61. You're not however entitled to subsistence payments if you're out of the office for less than five hours a day.
"Overnight subsistence payments are even better," said Maxwell. "If you have to stay away overnight on business you can get up to €108.99 a night tax-free."
If you simply decide to work from home – rather than at the office – you won't usually be entitled to subsistence payments.
"If you work a lot from home however, you might qualify for the tax-free e-worker allowance," said Maxwell. "With that allowance, an employer can pay e-workers €3.20 per day tax-free for working at home."
GOING TO THE BANK FOR YOUR BOSS
If you use your own car for business journeys or work duties, you should be entitled to a mileage allowance to cover the cost of petrol.
As long as you don't drive more than 6,437 km a year for business purposes, you could get a tax-free mileage allowance of up to 59c back for each kilometre driven.
Once you drive more than 6,437km a year, the amount you can claim in mileage falls – the most you can claim back at that point is 28.46c a kilometre.
"If you use your car for business purposes at all, such as going to the bank or deliveries to or from customers, you could be entitled to a mileage allowance," said Maxwell.
For example, if you drive 419km on business in a 1.6 litre Ford Mondeo this week, you'll be entitled to €247 back in business mileage, according to Maxwell.
You won't make money on mileage allowances, warned Paul Dillon, tax partner at Duignan Carthy O'Neill. "Mileage allowances only compensate you for your costs," said Dillon.
If you drive for work, you might be considering taking a company car – instead of buying a car yourself and claiming mileage.
If you take a company car, it is treated as benefit in kind and you will pay tax on that benefit in kind. Despite this, if you drive a lot for work, it may make more sense for you to get a company car than to claim mileage on your own car, according to Dillon.
"Certainly the higher the mileage that someone undertakes, the lower the benefit-in-kind charge and the more advantageous it would be to use a company car instead of owning a car – and paying personally for the depreciation and maintenance costs on a high mileage car," said Dillon. "Each decision however needs to be taken on a case by case basis."