self employed - pensions tax relief

[sue97]

I am self employed and am doing my figures for the accountant for 2007.
I think that if I put up to 20% of my income into a pension before October tax deadline, it is tax deductable from 2007 income.

Is this correct?

 

[ClubMan]

Yes - assuming that 20% is the appropriate pension tax relief limit for your age. You can also claim PRSI back on it. This is the case whether you are self employed or PAYE. See the key posts on these two issues. You should run issues such as this by your accountant/financial advisor too just to make sure that you are doing the returns correctly and in case there are specific pension options most suited to your specific circumstances.

 

[sue97]

Thanks ClubMan,

Will run it by the accountant when he is doing my returns but was looking for a quick answer now, want to be sure I have enough cash put aside.

 

[KDA man]

you can only claim prsi back in the year the pension contribution was made. So in your case you can offset for income tax for 2007 and prsi for 2008

 

[ClubMan]

you can only claim prsi back in the year the pension contribution was made.

Are you sure? I could have sworn that I backdated claims for tax and PRSI against a previous tax year on a lump sum paid before October 31st of the following tax year. But I'd need to double check to be absolutely sure. I am PAYE in case that matters.