The tax return deadline is just around the corner. The deadline for those submitting their return on paper is 31 October and 13 November for those submitting it online through the Revenue’s ROS system. A common way to reduce your tax bill is through pension contributions. So, how does this work?
In our example, we have a 40 year old earning €100,000. Under Revenue rules, he can contribute 25% of earnings to a pension.
The total cost of pension and tax will cost you €69,300, an additional €4,500 than if you just paid your tax bill.
But, you as well as settling your tax liability, you now have €25,000 invested to grow tax free and be spent on something fancy when you retire.
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