There are numerous mistakes that people make but some of the most common are as follows:
Not completing the Extracts of Accounts – The extracts of accounts is a summary of your financial statements for the year. Many people are unsure how to fill this out and leave it blank. Revenue use these figures to compare profitability, salaries, expenses etc against information they have on file and against industry standards. Failure to complete this section may increase your chances of getting a Revenue audit.
Not including “exempt” income – people hear the words tax exemption and think they do not have to report the income. Even if there is not tax to pay you must still report the income to Revenue. A number of tax exemptions only apply to income tax and you may still have a liability to USC and PRSI.
Making a loss, don’t need to report – We see this a lot with rental properties, people assume that if they are making a loss they do not need to report to Revenue. Losses need to be reported the same as profits! You can utilise these losses against profits in later years but only if Revenue have a record of the losses in the first place
I paid tax on foreign income so it doesn’t need to be taxed in Ireland – Some people believe that if you have income from a foreign source and it is taxed abroad then you do not need to report it in Ireland. If you are tax resident in Ireland then you owe tax on your worldwide earnings. Foreign sourced income may also be taxed in that other country and you may be able to claim a credit for these taxes against your Irish tax bill, reducing or eliminating any further Irish tax on the income.
Disclaimer: Advice shared in this blog is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this forum, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.