Are you self-employed, a proprietary director or an employee in non-pensionable employment?
If so, you’re required to file an annual self-assessed tax return to finalise your 2018 accounts by 31st October. If you file on-line, which most people do, you have until next Tuesday, 12th November to do so.
If you have a tax liability for 2018, then you still have a short window of opportunity to reduce or eliminate it.
For example, let’s say you have a 2018 final tax liability of €10,000. You can also afford to make a personal pension contribution of say €12,000 into your pension fund. Well then, as a 40% taxpayer, you will get relief of €4,800, immediately reducing your 2018 tax liability down to €5,200.
By reducing last year’s liability, you’ve also reduced this year’s preliminary tax liability by the same amount. A DOUBLE TAX ADVANTAGE, and a net cost to cash-flow this year of just €2,400.
And remember, you’ve just put aside €12,000 into a pension fund for your own future. Of course, this double tax advantage only occurs in the 1st year. It will even out to one year’s tax advantage for each year going forward.
Didn’t I mention a 66.66% immediate return on your investment? That’s right, I did but how so?
Net cost to you €7,200,
The State puts in €4,800
This equates to a straight up 66.66% return on your investment and that’s before any potential growth.
Remember though that the deadline is fast approaching. Would you like to action on the above or find out a little more about other tax saving options? If so, get in touch without delay. You can do so by contacting 096-75951, 086-8053755 or email@example.com
Lifestyle Financial Planners offer Tax-Efficient, Wealth Management, Retirement and Estate Planning solutions to our clients. Paul is a Certified Financial Planner CFP® and holds a Masters Degree from UCD in Financial Services and Risk Management. Please share this blogpost if you think it has been informative or might help some others you know. Remember, all introductory Discovery Meetings are held at our expense, so feel free to get in touch today!
The information contained in this article is for general information only. It should not be used as the basis for any form of agreement or advice. We recommend readers seek separate tax and legal advice where necessary. This information does not take into account your own particular circumstances. Errors & Omissions Accepted. Investment funds can fall as well as rise.Lifestyle Financial Planners Ltd t/a Lifestyle Financial Planners is regulated by the Central Bank of Ireland.