4 Steps to help you prepare for your first income tax return in Ireland

Taxes form an essential part of Ireland’s economic landscape. A report from 2022 shows that tax collections surpassed €93.3 billion in Ireland.

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Income tax returns are vital aspects of the process. If you are filing income tax for the first time, you might feel overwhelmed. But with proper preparation and understanding, you can navigate it effectively. 

Key terms in filing your tax returns

Before filing for an income tax return in Ireland, let us address some specifics. 

1. Self-assessment tax

You should enrol for a self-assessment tax return if:

  • You are self-employed or work for yourself.
  • Your primary source of income comprises:

1. Rental earnings
2. Investment proceeds
3. Foreign earnings (inclusive of foreign pensions)
4. Alimony payments
5. Fees exempt from Pay As You Earn (PAYE)
6. Or if you’ve realised gains from share options or incentives.

2. Form 11

This document is essential for submitting a self-assessment tax return. People usually interchangeably use the terms tax return and form 11. 

3. Preliminary tax

These taxes include the following:

  • Estimated income tax
  • Pay-related social insurance (PRSI)
  • Universal Social Charge (USC)

Pay these taxes by October 31 of that tax year. Pay preliminary tax at least the otherwise required amount to avoid paying interest.

Steps to prepare for income tax return in Ireland

Step 1: The first step in filing your tax returns is registering for ROS. If you are registered, check that your ROS certificate is renewed, and you can log in to ROS.

Step 2: The details provided in a pre-populated Form 11 are sourced from various channels. You can fill out a pre-populated return either online through ROS or offline using ROS offline options.

Step 3: Form 11 includes a calculation of your tax liability and a template for your self-assessment. To complete your self-assessment, you must confirm agreement with these figures. You are not required to perform any calculations regarding Income Tax, PRSI, or USC.

If you disagree with ROS’s calculation, you must conduct your assessment. After you have completed the form, go to the sign and submit tab.

Step 4: Finalise your ‘Statement of Net Liabilities’ and submit payment through ROS (Revenue Online Service).

To transmit the return to Revenue, you must re-enter your password in the ‘Sign and Submit’ box.

Income tax return period in Ireland 

Understanding the income tax return period is vital if you submit taxes for the first time. The last day to file your income tax return for the previous tax year is from January 1 to December 31.

Tips to ensure a seamless income tax return filing process

Here are some tips for the newcomers:

  • Organise financial documents

Filing income tax returns in Ireland needs some of your financial documents. Start early and assemble all required financial records, such as income statements, receipts, and spending reports. Having these records on hand will make things go more smoothly and guarantee that your income and deductions are reported accurately.

  • Consider online filing services

Consider utilising online resources such as ROS (Revenue Online Service) when submitting your taxes. Online filing has many advantages, such as longer submission deadlines and a more effective procedure overall.

  • Thoroughly review your return

Before filing your tax return, make sure all the information is accurate. Verify the accuracy of all stated income sources and deductions and settle any disparities.

  • Submit early

Rather than waiting until the last minute, file your tax return well before the due date. Early submission reduces the possibility of missing the deadline and gives you more time to handle unforeseen problems. 

  • Nominate a refund bank account.

You must have mentioned a bank account on record with Revenue for income tax payments. Yet, the Revenue Department doesn’t use the same for tax refund purposes unless stated.

So, nominate a refund bank account to minimise delays in receiving your tax refund.

Seeking professional help for filing income tax returns in Ireland

If you are still trying to figure out how to do an income tax return, consider seeking professional help. People seek professional help for various reasons. This includes: 

  • Time-saving: Filing taxes can take much time, particularly for people with complicated financial circumstances. Handing tasks to third parties can save a lot of time.
  • No errors: The intricacy of tax laws can make filing mistakes costly or subject to audits. A qualified accountant can handle income tax return filing and handling error proof as they are professionally qualified.
  • Tax optimisation

An experienced accountant can help you take advantage of any credits, deductions, and allowances for which you might be eligible. Also, s/he can find methods to lower your tax liability lawfully. 

An experienced accountant can maximise your prospective tax savings and ensure you pay appropriate taxes. 

Hire an Accountant

Work with Ireland-based Experts for tax, audit, accounting, payroll, & EIS/ SEIS needs.

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Monday to Friday 9am – 4:30pm

Conclusion

Filing an income tax return is essential not only for legal reasons but also to manage finances efficiently. With the steps mentioned above, individuals can confidently navigate their first income tax return filing in Ireland and ensure compliance with tax regulations.