31 October is an important date in all of our calendars. It represents a last chance to get some money back from the taxman for 2016!
CONTACT DAMIEN ON 01-4071430 TO SEE HOW MUCH TAX A PENSION CONTRIBUTION CAN SAVE YOU!
This is the final date on which you can claim tax relief on backdated pension contributions. If you pay a lump sum contribution by cheque and claim tax relief on this contribution by 31 October you can get tax relief in respect of the previous calendar year.
If you are self-employed you will have to calculate your tax liability in respect of
Your final tax assessment for 2016
And
Your preliminary tax for 2017
You can reduce your final tax liability for 2016, as well as your 2017 preliminary tax liability by making contributions to a pension by 31st October 2017 (or 16th of November 2017 if you are using Revenue Online Services ROS).
If you are self-employed the following example shows the value of using a pension to reduce your tax liability while accumulating a retirement fund for your future:
Example
Contribution paid 25 October 2017 €2,000
Reduction in 2016 tax bill (40% tax payer): €800
Actual cost to you of additional €2,000 into your pension: €1,200
If you make a pension contribution before 31/10/17 backdated for 2016, you effectively reduce your tax bill for 2016 with the tax relief on pension contributions. This will have the knock on effect of reducing the preliminary tax bill for 2017.
Tax relief is available as follows:
|
Age Band
|
% of Net relevant earnings
|
|
Under age 30
|
15% of Remuneration
|
|
Age 30 to 39
|
20% of Remuneration
|
|
Age 40 to 49
|
25% of Remuneration
|
|
Age 50 to 54
|
30% of Remuneration
|
|
Age 55 to 59
|
35% of Remuneration
|
|
Age 60 and over
|
40% of Remuneration
|
Please note that an earnings cap of €115,000 applies for contributions. Pension contributions made for 2016 must be deducted from the maximum tax-allowable contribution calculated based on these limits.
Subject to affordability, individuals on the higher rate of tax should consider maximising their pension contributions before the end of 2017 in order to benefit from the higher rate of relief available at 40%.
Please note that the Revenue deadline is extended for members who complete their tax return online using the Revenue Online Service (ROS). This year the extended deadline is Tuesday 14 November.
If you have any queries on saving for your retirement please contact the CIRT Admin Team on [email protected] or on 01 4071430