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How To Stay Tax Compliant As A Freelancer

3 Nov by Coffey & Co

Freelancing is a growing industry not only in Ireland but also around the world. There are people taking a leap into full-time freelancing. Others take it up in addition to their full-time job. If you’re taking up freelancing, it’s important to know that you’ll be expected to submit your income tax returns in October each year. 

The problem is that many people, especially freelancers, who earn income outside the PAYE system feel unsure of their tax obligations and entitlements. You don’t want to find yourself on the wrong side of the law. Check out some of our tips that will help you get ready for tax season as a freelancer:

Registering for ROS

The first thing you need to know if you are a freelancer is you need to register yourself with Revenue as self-employed. You can declare yourself as self-employed online through PAYE Anytime or by registering for Revenue Online Services (ROS).

To register for ROS, you need to:

  • Apply for the ROS Access Number (RAN). It will be posted to your home address once the application is processed. 
  • Use the RAN number to apply for a digital certificate. After inputting your RAN and completing the relevant sections, Revenue will post your ROS system password to you.
  • Access the ROS system using the password to download your ROS digital certificate. 

Registering for ROS can take up to 8 working days to complete. You will then use the ROS to file and pay your taxes. It’s important to note that you can’t use the self-service myAccount to file for self-employed income returns. You have to register for ROS.

As a freelancer, it’s solely your responsibility to assess your tax credits and how much you are liable to pay. To avoid costly mistakes, it’s advisable to hire professional accountants to do this for you.

Making Enough to Cover Your Taxes

There are tax deductions such as health insurance and pension among other benefits that are traditionally paid for by employers. If you are self-employed, you will have to pay for them yourself. Ensure that you price your services high enough to cover these costs. It will help you to avoid paying more than you can afford.

If you want to get an idea of what taxes you will be liable for, you can use an online freelance tax calculator. But the ideal estimate is usually between 25% to 30% over your price.

Leveraging Available Tax Reliefs

Like any other business, there are costs you can deduct to lower the amount of taxes you have to pay. These include office supplies, computer equipment, utilities, operating expenses, and advertising and marketing costs among others. 

But to be able to take advantage of these deductions, you will have to maintain separate personal and business accounts in addition to keeping all your business receipts and invoices.

Getting Paid Hassle-Free

Different tax rates and regulations may apply if you’re billing international clients and receiving payments through a bank account, wire transfer, and online payment wallets. It can be difficult to track all your income if you’re getting paid through all these methods. Set up a global payment processing account to streamline and centralize all your transactions. It makes it easier to file your taxes.

Need More Information?

If you are a freelancer, we will take the hassle out of filing your annual tax returns. We’ll take care of the paperwork and ensure you’re able to claim every tax relief you’re entitled to. Additionally, every single tax return will be checked by an experienced senior accountant to ensure you are fully compliant with the Revenue.

Need more information? We are here to answer your questions on how to be tax compliant as a freelancer. 

Leave us a message.

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