End of Year Tax Tips 2023
With year end fast approaching now is a good time to review your current tax situation and make plans for the future. Bryan Farrell and Fergus Woodcock have some top tax tips to consider before the year end and into the new year.
Employers should familiarise themselves with the new Enhanced Reporting Requirements for certain benefits and expenses paid to employees (including mileage and vouchers). Reporting the details of these expenses and benefits will commence on 1 January 2024.
Businesses should ensure that all current tax filings are up to date and paid in order to protect their approved status for the Debt Warehousing Scheme.
Charity donations result in additional tax relief payable to the relevant charity by Revenue which can increase the value of your personal donation. Minimum donation required is €250 per year.
Individuals may receive a gift up to the value of €3,000 per year free from Capital Acquisitions Tax (CAT). For example, a child can receive a gift of €3,000 from each parent. This can be significant when it is also used for grandchildren and in-laws.
Final chance to make a claim for tax relief on unused tax credits for 2019 (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 Capital Gains Tax (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 which qualify for the 7 year CGT exemption.
Employees (including directors) can receive a gift voucher from their employers up to the value of €1,000 free from tax or BIK.
A Benefit in Kind exemption is available for electric cars provided to employees. The exemption limit of €45,000 has been extended into 2024. An electric car could represent a significant saving in BIK to employees/directors in comparison to a petrol/diesel car.
Company pension scheme payments should be paid prior to the accounting year end to ensure the company can claim a tax deduction. Consider the use of a PRSA for greater flexibility around contribution levels.
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 2023.
An employer can pay €3.20 per day tax free to employees in relation to remote working costs.
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 personal tax return.
Review tax returns across all tax heads in the past year. Revenue allows a 12-month window in which to self-correct a tax return without incurring a tax penalty.