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Sole Trader Income Tax Return - Kevin Kelly, TaxAssist Accountants Dun Laoghaire It’s that time of year again; time to start planning for your income tax return 2011. There are common issues sole traders run in to in preparing their income tax returns. Common question – is a sole trader obliged to fill in a tax return. There is a mistaken belief out there that if you made a loss you do not have to file a return, this is not the case. So, remember that all sole traders are required to prepare accounts and submit a tax return regardless of whether they made a profit or a loss. ALLOWABLE EXPENSES Sole trader’s profit figure is calculated by deducting allowable expenses from your sales. Issue of allowable expense is crucial. Was the expense incurred ‘wholly and exclusively’ for the purposes of your trade. The expense must apply only to your business and not to your personal expenses. For example you can claim an allowance for business travel or for using personal computer or office for business purposes. CAPITAL ALLOWANCES Capital allowances are another area where sole traders often make mistakes. Capital allowances apply to the tax deduction you can claim when buying larger items such as computers or plant and equipment. The issue here is to a) ensure you claim these allowances and b) you claim them correctly. MISSING TAX CREDITS It is incredible how often sole traders fail to claim all of the tax credits they are entitled to. Make sure you are claiming all of the tax credits available to you to pay the right amount of tax Once you have calculated your tax you should consider tax planning strategies such as contributing to pension funds, splitting your income with a spouse or forming a company. To discuss your tax return and tax planning strategies contact us today for an initial free consultation: TaxAssist Accountants; 7 Patrick Street, Dun Laoghaire, Co. Dublin Tel: 01 9010457 Fax: 01 9010458 Email: kevinkelly@taxassist.ie www.taxassist.ie/dunlaoghaire

Sole Trader Income Tax  

Sole Trader Income Tax Return - Kevin Kelly, TaxAssist Accountants Dun Laoghaire

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