Taxes for Individuals with Additional Income: Individuals who earn income from interest, dividends, and foreign sources are generally required to submit an Income Tax Return (Form 11 for self-assessed individuals). When filing taxes, these individuals may qualify for tax relief on specific expenses related to generating their additional income. However, eligibility for deductions depends on the circumstances and the type of income earned. Below are some of the key deductible expenses associated with taxes for individuals with additional income
Interest Income
- Bank Fees: If you incur any charges on a bank account or an investment account where interest is earned, these may be deductible.
- Interest on Borrowed Funds: If you borrowed funds to invest in a particular asset that generates interest (e.g., buying bonds or stocks), the interest on that loan may be deductible. However, the loan must be used specifically for investment purposes to be eligible.
Dividend Income
- Management Fees: If you pay for professional investment management services (e.g., a broker or financial advisor), the fees could be deductible against your dividend income.
- Bank and Custody Fees: If you incur charges from the bank or a custodian to hold or manage your investments, these may be deductible.
Foreign Income
- Foreign Tax Credit: If you have foreign income (e.g., foreign dividends, interest, rental income, or salary) and have paid tax in the country where the income was earned, you may be eligible to claim a foreign tax credit against your Irish tax liability. This is not a direct “expense,” but it reduces the overall tax burden by accounting for taxes paid abroad.
- Foreign Currency Exchange Costs: If you incur costs related to currency conversion (e.g., fees charged by banks or brokers for currency exchange), these may be deducted when calculating foreign income.
General Deductible Expenses (if applicable)
- Professional Fees: If you pay for professional advice (such as tax advice or accounting services) that is directly related to managing your investment income or foreign income, these may be deductible.
- Travel Expenses: If you need to travel abroad to manage or acquire income-producing investments, you may be able to claim travel-related expenses, though this is typically more relevant to business income.
- Investment-related Expenses: Expenses related to maintaining investment income, such as legal fees for estate planning or fees related to maintaining property that generates foreign rental income, could be deductible.