Making Cents: Here's how to file for a tax refund (it's easier than you think)

Some practical tips to help you get cash back from the Revenue

Making Cents. 'Tax refund ahead' road sign. Sign, Message, Road Sign, Road Warning Sign, Tax.

Funds running a little low this month? Would some extra cash come in handy over the next few weeks? The good news is that you may be entitled to a refund from Revenue, and it has never been easier to claim it.

Early statistics show more and more of us see the value in completing a tax return.

“More than 900,000 Income Tax returns were filed for the year 2020 by PAYE Taxpayers, 98% of which were filed online,” a Revenue spokesperson said. “In excess of 500,000 had overpaid tax.

“So far this year more than 190,000 Income Tax Returns forms have been filed for the 2021 tax year, a sizable increase on this time last year..” From January 17, Revenue will make a Preliminary End of Year Statement available in myAccount to all PAYE taxpayers and they are keen to stress how straightforward it is to check this and then make a return.

“An employee can finalise his or her income tax position for 2021 by completing an income tax return online,” the spokesperson said. “This tax return will be pre-populated with the information shown on the Preliminary End of Year Statement. An employee can then review and accept the information presented, make amendments, claim additional tax credits (e.g. health expenses) or declare additional incomes as necessary.

“This pre-population makes it quicker and easier for taxpayers to complete returns and minimises the possibility of errors and omissions.

“The quickest and easiest way to complete an income tax return is through PAYE Services in myAccount. A taxpayer can also access the services in myAccount if he or she has a verified MyGovID account. Otherwise a taxpayer can register for myAccount on www.revenue.ie. Instant access to the services in myAccount is possible, if the individual is able to provide certain documentation that verifies his or her identity as part of the registration process. 

The turnaround time for receiving an income tax refund and Statement of Liability is generally 3-5 working days following completion of an income tax return.” 

Having used the myAccount service to complete my tax return for the last several years, I can confirm it is easy to follow and as quick as they say, you can add your bank details online and see a payment into your account within the week.

Some of the most common income tax credits due include health expenses, tuition fees paid for third level education and Single Person Child Carer Credit (SPCCC), for parents or guardians who care for a child on their own.

One that many people will have been eligible for since the pandemic began is the allowable remote working costs for those working from home. For 2021, employees can claim back 10% of their electricity and heat costs and 30% of broadband costs. In 2022, the percentage of electricity and heat costs will also rise to 30%, which will increase the amount you can claim back next year. It is important to note that if your employer pays you an allowance towards your expenses, the amount paid is deducted from the amount you can claim back from Revenue. You can only claim for the days that you work from home, see Revenue.ie for an explanation of how to calculate how much you can claim.

Revenue also wanted to highlight that for certain tax credits, you do not have to wait for the end of the year to claim.

“Revenue recently made a Real Time Credit facility available whereby certain income tax credits can be claimed in real-time,” the spokesperson explained. “Claims for health expenses and nursing home expenses can be made at the time the expense is incurred. “Employees can benefit from increased tax credits in the next payroll run from their employer.” More information on Real Time Credits is available at revenue.ie.

Pick of the Week

Aldi have a baby range going on sale on Sunday and the pick of the selection is the Nuby 3-In-1 Baby Carrier, for €24.99. It can be used from when your baby is a newborn and is suitable for babies up to approximately 14kgs. 

This carrier can hold baby in three positions: facing your chest (new born), baby on the back (6m+) and baby on the front facing outwards (6m+). "The sturdy waist belt and adjustable padded straps help to support weight on our hips to avoid any discomfort," Aldi says. 

"The padded seat provides extra comfort for baby and keeps their legs perfectly positioned in the frog-leg pose."

The carrier is wipe clean onlu and features a padded seat for extra comfort for baby, removable padded heat support and a detachable dribble bib. 

The carrier and the rest of the range go on sale on Sunday January 23.