You may not be crossing the paths of any black cats today, but if you are attempting your tax return, you could be making some mistakes that will provide more bad luck than walking under a ladder!
So, to celebrate Black Friday, I thought I’d put together a list of the 13 unlucky mistakes that you could make by attempting to do your own tax return.
1. Assuming the Information that Revenue has for you is correct
This is the most common mistake! Our tax agents are constantly in contact with Revenue to correct errors about our customers. And, more often than not, the error has resulted in Revenue incorrectly believing that the customer owes them money!
This is a big issue, particularly if you don’t know what you’re looking at, and just assume that Revenue has the whole picture. Things like Social Welfare payments and Medical Cards can fall through the gaps as the sharing of information between Government departments is – shockingly – not as seamless as you would think.
2. Miscalculating USC
Similar to the first mistake, Revenue may not have the complete picture of your circumstances – for example, they may not know if you hold a Full Medical Card. Therefore, if you haven’t paid USC in a particular year, Revenue will contact you trying to claim back the USC that you owe them. Our Tax Agents have had several of these cases just in the last week, which we have corrected for our customers and rather than giving them the news that they owed Revenue money, we were able to turn it around into a refund for them.
3. Not claiming for Bin Charges
Many people think that they can’t claim for bin charges anymore, but you can still claim for your charges in 2010 and 2011. Revenue has a 4 year review rule, so you can still claim back these past expenses if you submit your return now.
4. Eligibility for the Rent Tax Credit
It seems simple – if you’re renting, then you claim the Rent Tax Credit – right? Well, not exactly. Revenue are trying to phase this tax credit out, so there are some eligibility rules that apply. Namely, you need to have been renting continuously since 7th December 2010. Once you stop and/or start renting after that, you can’t claim this tax credit.
For example, if you were renting in 2010 & 2011, then travelled overseas in 2012 and started renting again in 2013, you can only claim the Rent Tax Credit for 2010 & 2011. Likewise, if you moved out of home in 2011 and started renting, unfortunately, you can’t claim this tax credit.
5. Thinking only mum can claim the Single Parent Tax Credit
In Brief: You are eligible for the One Parent (or Single Parent) Tax Credit if you are a parent not living with a partner and your child lives with you at least part of the year. Up until 2014, both parents can claim this tax credit so long as they are no co-habiting with another partner/spouse. Blokes, in particular, are shockers for claiming this tax credit as they think it will impact on the mother’s Social Welfare entitlements. But, for 2013 and prior – it doesn’t!
So, how do you know if you are eligible? Just answer these questions:
- Is your child/ren under 18, or if over 18 they are in full time education?
- Are you living alone? And by this, I mean you can’t be living with anyone other than your kids.
- Does your child spend at least one night of the year with you?
If you answered yes to all of these questions, then you can claim this tax credit for 2010 – 2013!
6. Only requesting a P21 Balancing Statement
‘Sure it’s easy to get a tax refund – you just request a P21, right?’ We hear this on a daily basis and if it were true, then yes – that would be easy! But in reality, there could be errors on your P21 which mean you could be missing out on a whole range of refunds.
This also applies when you just send in your P60 – Revenue will NOT do your tax return for you. They will only provide you with a statement of what they have on their system. They definitely won’t be highlighting additional credits and reliefs you could be missing out on!
7. Not claiming all your eligible Medical Expenses
We all have our few receipts from GP visits and prescriptions that we could claim – sometimes we do (if we’ve managed to keep the receipts) and more often than not we don’t bother (mainly because we’ve lost the receipts – or is that just me?!).
But, did you know that you can claim Medical Expenses for ANY eligible expenses you’ve paid – whether it is for yourself or for someone else (so long as they don’t claim it also). And this also applies if you’ve paid for medical expenses overseas!
So, say for example, you went on a holiday to Marbella and your child got sick and you had to go to the doctor and then purchase medication. Keep those receipts as you can claim back 20% of the expense with your tax return for that year!
Likewise, anyone in the business of going overseas for major dental or other medical treatments – if they are eligible treatments, then you can claim relief back here in Ireland.
8. Is your spouse a stay at home carer?
Yes? Then you can claim relief for that. The Home Carers’ Tax Credit allows married couples (or those in civil partnerships) where one spouse stays at home to care for a dependent child or other incapacitated person to claim an extra credit. This can be worth €810 in tax credits for you, so long as the carer doesn’t earn more than €5,080 in the year, then it starts to get reduced.
9. Not receiving PAYE Tax Credit to Social Welfare Income
This wee bug in the Revenue P21 calculation system affects married people where one spouse has only Social Welfare income. Basically, this spouse should receive the PAYE tax credit up to €1,650, depending on the amount of Welfare income.
Through spotting this error, we have turned a lot of cases where Revenue believe they are owed money, into handy refunds.
10. Not updating your Marital Status
If you get married, you can start sharing tax credits, which can reduce your tax bill by over €2,500 in a year. Some other tax credits will increase if you are married, such as the rent tax credit which doubles for married couples.
A new change in tax came about with the Civil Partnership Bill which is now in place. Basically, in terms of tax credits, civil partnerships are treated the same as marriages, so it’s best to ensure that you are claiming all the right tax credits to maximise your refund!
11. Missing out on refunds for your Job
There are literally over 200 different jobs that can claim expenses for. This means that these expenses will be deducted from your income before your tax is calculated – meaning a nice handy refund if you haven’t been claiming this! Revenue sets Flat Rate Expenses for a whole range of occupations that can be claimed – basically, so long as your job is not sitting in front of a computer all day, you should be covered by some sort of expense.
12. Ignoring the problem
Hoping it will go away is not the solution. So many people procrastinate over taxes and more of us a fearful that there could be something ugly lurking there that we don’t want to know about! If it does turn out that you owe Revenue money, it’s better to find out sooner rather than later before it becomes an even larger amount of money!
In these situations, we can try and find ways to reduce the amount you owe through claiming other eligible credits and reliefs and quite often, we have managed to turn this around to secure our customers a refund instead.
13. Trying to navigate the system yourself
Unless you love tax and will love spending hours reading through all the material on Revenue’s website, then realistically, there is a very high chance that you will make one of these mistakes. This is definitely not something you should feel guilty about, however.
Our philosophy is why waste your time and energy doing something begrudgingly, when you can hand it over to someone to loves it and allow yourself to get on with all the fun stuff! We love looking for after taxes and exploring any possible loophole that will help our customers get the best refund possible.
So, live a little! Apply now and free up some time to enjoy some guilt-free fun in sun.
Post Written by Nerilie Watson
I’m the Marketing Manager at Red Oak Tax Refunds and although I’m no tax expert, I LOVE getting money back from taxman. My job is to translate all the complicated and confusing ‘tax speak’ that is bandied about our office into something that is understandable for all us ‘average Joe soaps’.