According to an article in the Irish Examiner this week, we are now paying more tax in this country as a whole than we were 10 years ago.
In this week’s news we talk about the opportunity employees have to save tax against their 2017 income and increase their retirement savings at the same time.
This opportunity must be availed off before the 31st October 2018 or it will be lost.
An Employee can make a once off, lump sum payment into a pension before the tax deadline of the 31st October 2018 and offset it against their 2017 Income tax bill.
The benefit of this is two fold, in that you increase your retirement savings whilst you save tax against your 2017 income at the same time.
So how do you do it in 3 Easy Steps
1 – Pull out your P60 for 2017 and make contact with your Financial Adviser, or us at Peavoy Financial Planning and work out how much you can contribute and save tax on for the 2017 tax year.
2 – Pay the amount you wish to save into an approved pension contract by 31st October 2018. The pension provider will issue you with proof of payment.
3 – Contact your local Revenue Office with proof of payment by October 31st, stating that this contribution has been paid against your 2017 income.
How much Tax could you Save?
If you paid tax at 40% in 2017, then a €5,000 investment into your pension now could only cost €3,000, as you could claim a refund of €2,000 from Revenue.
How much can you contribute as an Individual and Save Tax on?
The maximum percentage of your salary/earnings that you can normally save into your pension each year and claim tax relief on, is shown in the table below.
For example if you are 40 years of age and already contribute 10% of gross earnings to your pension plan, you could contribute a further 15% extra as a lump sum now!
Revenue Limits Personal Contributions
| AGE | REVENUE CONTRIBUTION LIMITS |
|---|---|
| 60 AND OVER | 40% |
| Under 30 | 15% |
| 30-39 | 20% |
| 40-49 | 25% |
| 50-54 | 30% |
| 55-59 | 35% |
Don’t delay, as the opportunity to get Tax relief against your 2017 income is only available for employees up to the 31st October 2018. To request further information on what contribution may be suitable for you please contact David Peavoy on 087-2902206 or alternatively by email on david@peavoyfinancial.ie
David Peavoy BA, QFA, LIAP is the Owner of Peavoy Financial Planning whose practice is based in Office 5b, Portlaoise Enterprise Centre, Clonminam Business Park, Portlaoise, Co Laois.
David Peavoy T/A Peavoy Financial Planning is regulated by the Central Bank of Ireland
Disclaimer: All data and information provided within this blog is for information purposes only. It should not be taken as specific advice for your situation. Peavoy Financial Planning makes no representations as to the accuracy. completeness, or suitability of any information and will not be liable for any errors, omissions or delays in this information or any losses, injuries or damages arising from its use
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