OK Thanks,
So my drawings are not taxable?
That doesnt seem right?
If you earn income of 50k ,epenses 2k,you will pay tax and PRSI on 48k
Whether that money is sitting in the bank or spent is irrelevant
I also heard from someone that for the first year in business you do not pay tax, is there any truth in that?
I know you have to file the 2006 accounts before 31/10 but when do the taxes have to be paid?
I made a net profit of about 3000 euro in 2006, so will have to pay just under 600 euro (tax rate of 20%).
I know you have to file the 2006 accounts before 31/10 but when do the taxes have to be paid?
31/10/2007 for paper or 15/11/07 for online filing & payment
Net of what? If this is all you have left after allowable expenses (which does not include any salary you 'pay' to yourself), then it is still subject to your tax credits if you have no other income.
So you may have no tax to pay.
Or, if you have other income, e.g. a PAYE job where you paid 42% in 2006, the self-employed income (the 3000 euro) will be subject to a tax rate of 42%.
Don't forget about class-S PRSI. If 3000 is all your income, you will not have to pay the 2% health levy, but you will have to pay 3% PRSI or €253, whichever is the higher (as far as I can see!).
Or is it rental income??