Maximising Personal Contributions Before the 2023 Tax Deadline: How to Reduce Your Tax Bill and Get a Refund 

As the end of the year gets closer, it’s important to take steps to manage your finances and tax obligations. The Irish tax system offers different ways for you to reduce your taxable income and possibly get a refund by making personal contributions. Here’s a simple guide to help you make the most of these opportunities before the 2023 tax deadline. 

When is the Tax Deadline? 

In Ireland, the tax year runs from January 1 to December 31. For self-assessed taxpayers, there are two key deadlines for filing your tax return for the 2023 tax year: 

• October 31, 2024, for paper-based returns. 

• Thursday, November 14, 2024, if you are filing online through the Revenue Online Service (ROS). 

To reduce your tax bill for 2023, it’s important to take action before these deadlines. By making the right contributions and claiming tax relief, you can significantly reduce your taxable income and potentially receive a refund. 

4 Ways to Maximise Your Contributions: 

1: Pension Contributions

One of the best ways to reduce your taxable income is by contributing to your pension. The government provides tax relief on certain contributions made to approved pension schemes. 

• Tax Relief: You can get 20% or 40% tax relief on your pension payments, depending on how much you earn. The amount you can contribute is limited by your age. For example, if you’re under 30, you can contribute up to 15% of your salary; if you’re 30-39, up to 20%; and if you’re 40 or older, up to 25%. 

• Maximising Contributions: Consider contributing more to your retirement savings at the end of the year, particularly if you’ve received additional income such as a bonus. This helps reduce your taxable income and boosts your retirement savings. 

2: Health Insurance Premiums

The relief is given as a discount on the cost of the policy, regardless of who the policy is for. This is known as tax relief at source (TRS). 

• Tax Relief: You can claim up to 20% of the cost of the policy. Review your health insurance policy regularly to make sure you’re claiming the full relief available. 

• Making Contributions: Consider making an extra payment towards your health insurance premiums before the tax deadline, if you’re able to do so. This will increase the amount of tax relief you can claim and ensure you’re covered for future medical needs. 

3: Charitable Donations:

Donating to registered charities is another way you can reduce your tax bill. 

• Tax Relief: If you donate more than €250 in a year to a registered charity, you can claim tax relief on that amount. If you pay a higher rate of tax, this can significantly lower the real cost of your donation. 

• Making Donations: Ensure that any charity you’ve donated to is registered with Revenue so you can claim the relief. Consider making an extra donation before the year ends to increase your tax benefit. 

4: Education Fees:

If you or a dependent are paying for third level education, you may be able to get tax relief on the tuition fees. 

• Tax Relief: You can claim back 20% of the tuition fees you’ve paid, up to a maximum relief of €7,000 per person per course. This applies to full-time education courses and can reduce your tax bill considerably. 

• Review Tuition Payments: If you’ve paid tuition fees this year, be sure to gather all receipts and documents to include in your tax return. 

Looking Ahead to 2024 

While it’s important to maximise your contributions for 2023, it’s also a good idea to plan for next year. 

• Set up regular contributions: Consider scheduling automatic payments for your pension or savings at the beginning of 2024 to make it easier to manage your contributions and taxes. 

• Get Financial Advice: If you’re unsure about the best strategies, speaking to a financial advisor can help. They can provide advice that’s tailored to your financial situation and help you maximise your tax relief. 

As the 2023 tax deadline approaches, taking action to maximise your personal contributions can significantly lower your tax bill and potentially lead to a refund. Whether it’s pension contributions, health insurance premiums, charitable donations, or tuition fees, these steps can improve your financial situation while reducing your tax obligations. 

Make sure to review your finances, gather necessary documentation, and consider making additional contributions before October 31, 2024, or the online filing deadline of Thursday, November 14, 2024. Planning ahead for 2024 can also help you make the most of your tax relief opportunities next year. 

If you need guidance, don’t hesitate to contact us for personalised recommendations. Stay proactive and make the most of your contributions for a brighter financial future 

Source: Revenue.ie