This June, the Revenue Commissioners will write to about 40,000 taxpayers requesting them to complete a Form 12 declaring any other income they may have earned outside of the PAYE system.
It is part of a drive by the Revenue to get more people in the PAYE sector to complete forms where they have other non-PAYE income. If you are a pensioner and in receipt of income, when combined with your state pension, puts you into the tax net, you will have to file a Form 12 if you are not already being taxed on that income.
If you wish to settle tax on non-PAYE income – such as rental income or income from savings – where the assessable amount is less than €3,174, you will have to file a Form 12.
You can claim a range of tax credits, allowances and reliefs through the form. These are – flat rate expenses, health expenses, home carers tax credit, foreign dividends, medical insurance relief, nursing how expenses, one-parent family tax credit and owner occupier relief.
Since 2012 relief on bin charges has been abolished. You will need to keep any relevant receipts for six years but you won’t have to send them to the Revenue.
For self-assessed taxpayers who must abide by the October 31 pay and file deadline, claiming relief for things like medical expenses and so on tends to happen as part of that process.
However, even if you already claim tax relief for your medical expenses, there is potential to save more. While medical expenses are easily the most popular relief to be claimed, there are aspects within this category that people are largely not aware of – for example in many cases if you are a coeliac or a diabetic you may be entitled to a tax relief on special foods. Also, if you attend a physio and have a letter from the doctor saying that this is necessary, you may be able to claim back on the fees charged.
Relief on medical expenses is typically granted at the standard rate, currently 20 per cent, but there is still potential to claim higher relief in specific areas. Nursing home fees, for a Revenue approved nursing home, still qualify for relief at the marginal rate, currently 41 per cent. Also, a lot of parents do not realise that they can claim tax relief for the third level fees of their children. However, with college fees as they are now, and many students pursuing post-graduate qualifications families could save up to €900 a year if they review their entitlement to tax relief
Once you identify what you can claim for keeping appropriate documentation to support your claim for additional relief or a refund is important.
Claimants are required to retain receipts for six years after the year of claim for possible future PAYE compliance checks. Taxpayers also need to act promptly when it comes to reviewing previous tax years. You have a four year window and that can slip by pretty quickly.
This article was written by smithandpearson