At this time of year, most self-employed professionals are buried in the wonderful world of tax as the file and return deadline looms. Being tax efficient pays, so here are two important facts when it comes to managing your finances:
Most Income Protection Plans are now subject to tax relief, meaning that your monthly premium will be significantly reduced depending on your earnings. For example, if a person earning €50,000 per annum takes out a plan to protect their income and the premium is €80, tax relief will bring that down to €48.
When it comes to pensions, a major benefit of being self-employed is that you can claim pension payments as a business expense. By setting this up, you can effectively redirect your tax payments into your pension fund. Even though you own the pension fund that you are paying in to, it is still treated as a business expense for you and reduces your taxable profit in that year.