Despite the Corona Virus the taxman is alive and well and hasn’t been laid off or made redundant.

Everyone would like to save money on their tax bill, but it’s not always easy to know what options are out there and which savings apply to you.

Here are 12 ways in which to cut your tax bill

1. Tax Saver Commuter Tickets

Introduced in 1999, this scheme is designed to encourage people to use public transport to get to and from work. Employers simply register online and purchase monthly or annual tickets for their staff, with the cost deducted directly from the employee’s gross salary.  

While employees can save hundreds of euros on their commute, the scheme saves employers 11.05% on PRSI payments as the employee’s gross income is reduced.

2. Rent A Room Relief

If you have a spare bedroom in your property, then renting it out can be a great way to get some tax-free income. To qualify for Rent A Room Relief, you must meet a few conditions. For example, the gross annual income from the rent must not exceed the exemption limit (this is subject to change but has been at €14,000 for the past few years).

3. Pension Contributions

Pension contributions are one of the most efficient ways of saving tax. If you pay into a qualifying pension plan (including occupational pension schemes, PRSAs and RACs), then you can get Income Tax relief against earnings from your employment for your pension contributions. So not only are you saving money for the future, you are also paying less of it to the tax man.

4. E-Worker Relief

If you work from home on a full or part-time basis, your employer may pay you up to €3.20 per day without deducting PAYE, PRSI or USC. This relief is designed to offset some of the cost of some of your bills that may increase with additional time spent at home, for example, your electricity, heat, and internet bill. Your employer may offer to pay more than €3.20 per day, but anything over that amount will be taxed.

5. Medical Expenses

You can receive tax relief for qualifying health expenses at a standard rate of 20%. Qualifying expenses can be your own health expenses, those of a family member or any other individual’s, as long as you are the one who paid for them. 

Non-routine dental expenses like braces are also covered although things like fillings, scaling/cleaning and tooth extraction are all considered to be routine dental treatments, so won't be reimbursed.

6. Work Expenses

Also known as flat-rate expense allowances, these are costs, that certain professions can claim for that are incurred as part of their day-to-day work. Qualifying work expenses help to save money on tax by reducing the amount of taxable income. They usually include things like tools, stationery and uniforms. For certain professions, you don’t even need to incur an expense to be able to make a claim. Dentists, for example, are entitled to claim €376.

Revenue - List of Working Expenses

7. Bike To Work Scheme

This is another incentive scheme that can save employers money on PRSI payments while employees save on the costs of cycling to work. It works by the employer purchasing a bike and equipment (including things like helmets, lights, puncture repair kits, and reflective clothing) up to the value of €1,250 (€1,500 for ‘e-bikes’ and related safety equipment). 

The employer will then arrange salary deductions from the employee over a period of up to 12 months to cover the cost. The repayments come out of the employee’s pay before tax, USC and PRSI are deducted, making for great savings for both parties.

8. Tuition Fees

If you are attending an approved undergraduate, postgraduate, IT or foreign language course, you may be able to claim tax relief for fees up to €7,000. As the relief is available to the person paying the fees rather than studying, you can claim tax back on your child’s tuition fees as well as your own. 

There is a €7,000 limit per course, per person, per academic year, though each claim is subject to a single disregard amount of €3,000 (for full-time courses) or €1,500 (for part-time courses) each tax year. There is also no relief available for things like exam and administration fees.

9. Aged 65 or Over? Age Tax Credit & Income Tax Exemption

Once you, your spouse or civil partner are over the age of 65, you are entitled to an additional tax credit on top of your personal tax credit. If you are single or widowed, in 2021 you are entitled to a €245 tax credit, while if you are married or in a civil partnership you can claim €490. 

10. Consider Starting Or Investing In A New Business

There are a number of reliefs available as incentives for entrepreneurs and investors, including Start Up Capital Incentive (SCI), Employment Investment Incentive (EIIS) and, Start Up Refunds for Entrepreneurs (SURE). Though they each work in different ways, if you make qualifying investments in qualifying companies you may be able to claim income tax relief on the amount you have invested or get a refund of income tax that you paid in previous years.

 11.  Nursing Home Fees 

Whether the nursing care is for yourself or someone else, if you are paying for the fees then you are the person eligible for tax relief. The rate of tax relief granted on nursing care and nursing home fees is granted at the highest rate of income tax that you are paying yourself.

If you pay tax at the higher rate, tax relief on nursing home fees can be claimed at the higher rate of tax i.e. 41% circa of your gross income.

 12. Home Care’s Tax Credit

Most people are unaware of the home carer tax credit. This tax credit currently stands at €1,600 per year, and can be claimed by any married couple or civil partnership where at least one of the spouses is a stay-at-home carer for either a dependant or their own children.