A couple of niggling tax return questions - any help would be appreciated!

[Cloudless]

I know there's no substitute for professional tax advice, but just wondering what the general feel about these issues would be, if anyone can help!

Basically my situation is that I've been ill in the period 2008-2009, and not earning income. I started working for myself on a freelance basis towards the end of 2010, registered as self employed etc. So I've my first return coming up, and the amounts involved are so small that I'm handling his myself on ROS instead of using an accountant. But a couple of things...

1. If I entered a contract for a freelance job but have not yet been paid, that still goes down in my Sales, right? And also as a debt?

2. If said contract was in US dollars (all my revenue originates in dollars), how should I specify the value of that sale in euros? I have euro amounts for all other income, the exact amounts that landed in my bank account, but this amount is still obviously an unrealised number of dollars.

3. I'm not sure what the threshold is for PRSI, but if I don't reach that threshold, I can still volunteer to pay it, right?

And finally...

4. Will Revenue care if my declared income for the year is low? I'm living at home, I've been supported by my parents through all this, my own expenses are very low. They might wonder how I'm living on my own income, but in the context of living with family etc. it all works out. Should I tell them that in some part of the return? And on another note, should I declare any support I receive from my parents as 'income'? For example, expenses they may have covered etc. - do I have to declare that to revenue? Or the odd (small) bit of cash they might have thrown my way? My instinct is that this would be stupid and they don't care about support within families etc. but I'm just curious...

Thanks for any help I think I'll get an accountant for my next return...

 

[Gervan]

Welcome Cloudless.

1. You are correct. Invoices issued by you are Sales and taxable income. If any invoice becomes a bad debt with no chance of you receiving your money, that will be dealt with in your account for the year you recognise the bad debt.

2. Enter as per the Revenue exchange rate €1 = $1.3257 for 2010 income. [broken link removed]

When the money is lodged you can deal with any difference by including a figure in your 2011 accounts for loss or gain on currency exchange. It sounds as though it would be quite a small amount.

3. You may not be eligible to pay voluntary Prsi.
From welfare.ie:
To become a voluntary contributor you must:

• have paid at least 260 weeks PRSI in either employment or self-employment
  and
• apply within 12 months of the end of the contribution year* (see below) during which you last paid compulsory insurance or you were last awarded a credited contribution.
  and
• agree to pay voluntary contributions from the start of the contribution week that follows the week in which you leave compulsory insurance

The threshold above which you must pay Prsi is very low:
All self-employed people aged between 16 years and 66 with earnings more than a specified amount (currently €3174.00 per annum) must pay PRSI.

4. Support by your parents is not taken as an income by Revenue. I remember my son being treated by Welfare as receiving an income from us when applying for unemployment allowance years ago. It infuriated me that what was a cost to us was somehow turned into an extra cost, in that he received a reduced allowance.
If you wish to put a note in on the return you can do so, but I don't think it's necessary.

Good luck with the return and the business.

 

[Cloudless]

Awesome replies Gervan, thanks so much! That pretty much settles everything in my head.

 

[Cloudless]

Whoops - one last question!

Does anyone know how PRSI works with ROS? In my summary it says I owe €253, but when I go to submit and sign it seems to be only asking about preliminary tax for 2011...I don't see any field for PRSI. Do you pay PRSI via ROS, or is that done separately?

Thanks again for any help

Update - I just submitted without payment, so I guess they'll send me a notice of assessment which will include the PRSI (?) That seems the handiest way to do things since it wasn't at all clear how I'd be paying for PRSI on the ROS payment form.