Lowering My 2017 Tax Bill

[saviro]

I've neglected looking in to contributing to a pension for far too long (37 this year) but I can't go back and change that situation now. I'm self-employed and below is what I think 2017 would look like if I began contributing to a pension.

Have I got the calculations above right (as in, the 20% pension contribution has been calculated correctly)? Thanks.

 

[Mary55555]

Don’t forget the earned income credit.. €950 for 2017..

Usc is calculated on net income after “normal” capital allowance
https://www.revenue.ie/en/tax-profe...ns-tax-corporation-tax/part-18d/18D-00-01.pdf


I would advise - just download the Ros software as it’s free and plug in the figures.. it tends to be very accurate too..

It’s obviously a good idea to contribute to pension.. but you are not getting relief at a higher rate.. the way you have calculated it is correct

Don’t forget you have preliminary tax obligations too

 

[saviro]

Thanks Mary. Looks like I neglected to account for the earned income credit in 2016. And I also used the old USC rates, so I've updated them now to reflect the 2017 rates. And I'm working off the net income after capital allowances (but not after pension contributions or earned income credit). I know I'm not getting relief at the higher rate but it's better than nothing. I'm still coming out slightly ahead. So this is how it looks now (think I have this right).

 

[vandriver]

Earned income credit comes of the tax payable,just like your personal tax credit.
You need to move it further down the equation.(and pay less tax!)

 

[saviro]

Sorry was feeling generous!

 

[Slim]

@saviro: I can't contribute to your query but just wanted to say thank you as your table has explained to me how my freelance income will be taxed next year. Slim

 

[deadlyduck]

Check the PRSI calculation- I'm 95% certain that it's calculated on income before deducting pension contributions (in your table, that's the same value used for USC).