2020 Year End Tax Tips
With year end fast approaching now is a good time to review your current tax situation and make plans for the future. Contact Bryan or Fergus from our tax team or your engagement partner to discuss the tax planning opportunities which you can avail of.
Here are some of our top tax tips to consider before the year end.
Charity donations result in additional tax relief payable to the relevant charity which can increase the value of your donation. Minimum donation required is €250 per year.
Individuals may receive a gift up to the value of €3,000 per year free from gift tax (CAT). For example, a child can receive a gift of €3,000 from each parent.
Final chance to make a claim for tax relief on unused tax credits (e.g. home carer tax credit, tuition fees, permanent health insurance). Four year rule applies.
Make a claim for any unreimbursed medical expenses for the last four years.
Avail of the annual CGT exemption of €1,270 and realise a gain of up to €1,270 without a CGT liability.
Realise CGT losses prior to 31 December in order to claim the losses against gains made this year. CGT losses cannot be carried back to prior tax years but may be carried forward.
Consider if there are opportunities to dispose of properties in early 2021 which qualify for the 4/7 year CGT exemption.
Employees (including directors) can receive a gift voucher from their employers up to the value of €500 free from tax or BIK.
Electric cars can be provided to employees free from BIK where the value of the car is less than €50,000. This could represent a significant saving in BIK to employees/directors.
Company pension scheme payments should be paid prior to the accounting year end to ensure the company can claim a tax deduction.
Claims for offset of company losses against trading and other income must be made within two years of the relevant accounting period end.
Bonuses paid prior to year end qualify for tax deduction in the current accounting year.
Claims can be made in respect of tax relief for working from home expenses during 2020. There is a tax free daily payment of €3.20 where paid by the employer.
The Stay and Spend tax credit is available for claims for expenditure between 1 October 2020 and 30 April 2021. The maximum tax credit is €125 per person provided sufficient tax has been paid.
Employers and businesses should avail of COVID support schemes such as the EWSS and CRSS, Tax debt warehousing where relevant.
If you are a landlord with rented residential property, ensure you are registered with the RTB (Residential Tenancies Board) in order to claim a deduction for loan interest on the properties.
Homeowners and landlords should ensure that their Local Property Tax returns and payments are up to date to avoid the imposition of a late filing surcharge on their tax return.
Review tax returns in the past year. Revenue allows a 12 month window in which to self-correct a tax return without incurring a tax penalty.