How to file income tax return?

Every year, the tax return is a nightmare for all the citizens. If this is your first time trying to do it, you’re in the right place. In this content, you will find everything you need to know. Together, we will see the tax return, how it works, who must present it, what types of declaration exist, and what documents are needed.

What Is The Tax Return?

The tax return is a tool that each taxpayer uses to communicate the amount of their income received to the tax authorities. Through its sending, every citizen who receives income during the year communicates his earnings and calculates any taxes due to the treasury. We used the word “possible” because filling out the declaration does not always imply payment of taxes. Given the declaration, it is also possible that the tax authorities are indebted to us, and this is one more reason to send it.

How The Tax Return Works

How the tax return works is quite simple in concept. They start by saying that it is a single and annual communication. Single means that all the information about the income produced by a taxpayer is transmitted with a single document, whereas annual implies that it always refers to a single tax year.

The drafting and sending period is the year following the reference year. For example, in 2023, the income produced in 2022 is declared.

The declaration is drawn up according to specific rules and follows ministerial models approved annually. Therefore, particular times and methods should be respected for its drafting and sending.

It is important to be aware of this condition and be confident in its drafting since the continuous updating of the software for completing the forms can lead to changes in the outcome of the declaration itself.

Once the declaration has been completed, each taxpayer can find himself in two situations: debit or credit.

The debt condition occurs when the taxpayer is required to pay a sum for the income produced during the year.

Credit is when the tax authorities owe a sum to the taxpayer for the income produced during the year. In this case, the taxpayer can request this sum for reimbursement (in specific cases) or keep the credit and use it for future debts.

Having seen what this document is and what it is used for, let’s see who is required to present the declaration, whether there are multiple methods, what the deadlines are for the presentation, who is responsible for drafting it, and above all, what is needed for its correct drafting.

Who has to file a tax return?

Just above, we said that the declaration is unique and reports all the taxpayer’s income during the year. Therefore, those who made money during the year should file their tax return. No, that is not right.

Sometimes, you don’t have to file your tax return even if you have money. In general, the subjects obliged to submit the declaration are those who, during the year, received the following:

• land income;
• investment income;
• income from employment;
• income from self-employment;
• business income;
• different incomes (copyrights, occasional services etc..)

Simplifying and personifying those who produce such income, we can state that all Value-Added Tax holders, workers, employees who have had multiple employers during the year, owners of properties, those who have received benefits, those who have produced income from online trading or capital income, those who have carried out occasional services.

However, to understand whether or not we are obliged to present the declaration, it can also be beneficial to define who is NOT required to present it. 

In some cases, even taxpayers who have produced income during the tax year are not required to send the declaration. 

These are:

• Those who carry out employed activities have had only one employer during the year.
• In the case of income for which a tax not exceeding 10.33 euros is due, provided that you do not have a VAT number.
• When you only own the main home and related appurtenances and other unrented buildings located in a municipality different from that of the main house.
• In the case of employee relationships, coordinated and continuous collaboration, including project work, pension provided that they are paid by a single tax withholding agent or adjusted by the last substitute;
• When you receive exempt income such as, for example, the incomes paid by war pensions, pensions, allowances, social pensions;
• In the case of income subject to substitute tax, such for example, interest on public debt securities;
• If you have income subject to withholding tax as a tax, such as interest on bank accounts.

Now that we have seen who must make the declaration or not, it goes without saying: “But if I am not required to make it, can I still send it? Do I have any advantages?”

Do File Income Tax Returns Have Advantages? The answer is yes!

Yes, because our tax system has benefits that allow you to find yourself in a credit situation. So why leave money to the taxman?

Instead, you would lose any credit you had and be unable to get a refund if you didn’t send in the statement. If you need more clarification, it’s better to show it. 

What you need to do to file your tax return

People always need help figuring out how to file their tax returns. The best way to do it, though, is to put it all together and send it through the revenue agency’s methods.

You can send pre-filled forms to these channels from your reserved area to contact professionals, such as a consulting firm, an accountant, the Civil Aviation Federation (CAF), patronages, or trade groups. You can also do things the “old-fashioned” way by printing out the form, filling it out, and sending it by mail.

Using a premade template can be a great idea in the most straightforward situations when you don’t have any special circumstances.

In more complex cases, however, when there are many changes to include in the declaration or in the case of VAT holders where it is necessary also to manage the accounting during the year, the advice of a professional can make the difference.

The templates for sending the declaration are pretty complex, and non-experts may find it difficult to enter the data.

Compliance With Law

Ireland is one of the places that wants you to report your taxes. Knowing that you follow all tax rules when doing things this way gives you peace of mind. You will be less likely to get in trouble with the law and get fined if you do this.

Get Rid of Fines, Fees, and Interest

If you file your tax return early, you may not have to pay as many fines and interest. Penalties from the government for not paying on time can add up fast.

Get your money from Social Security

You can get tax credits and other forms of help when you file your taxes. You have to send in your tax return if you want to get any credits or refunds that you are eligible for.

Things to give

When you send your tax return, they may look at every penny you have. With this information, you can organize your money, set some goals, and plan how you will spend your money.

Accounting records

Ensure you include all of your income from the year you file your taxes. If you can show that you can pay your bills, getting a mortgage, loan, or even a place to rent might be more accessible.

That you want your money back

In some cases, you might pay more than you owe. You can get your money back if you do your taxes carefully. The chances of this happening are higher for people who get a lot of tax breaks or have more than one way to make money.

Branding yourself

Doing your taxes on time will help your credit score. It also depicts that you are prudent with cash. Please read this carefully if you want to borrow money or get credit.

Spending money on the government

The government could use the tax money to fix up and maintain public buildings and services. This way, you know you’re giving the right amount of money to government programs and projects when you file your taxes.

Contracts and other business forms and papers

The tax return tells you how much money you made and spent. This could be used in court for divorce, wills, and other money deals.

Helps run a business

The government and many people have to file earnings tax reports each year. It is required but could be more enjoyable. Sharing money in this way is open and honest.

It is the rule that you must keep good financial records to file your income tax return correctly. Also, that’s a good idea. Tax rules, getting the most out of your benefits, and not getting fined may all be possible if you do everything correctly. Your tax records give you a full picture of your money, which helps you build credit, budget, and plan. 

The tax return is an essential fiscal document, thanks to which, as already mentioned, we communicate everything we have earned during the previous year to the taxman. To be clear, in 2022, the income earned during 2023 is presented.

It is appropriate to specify that when calculating taxes, not only what the taxpayer has earned thanks to his work activity is taken into consideration, but also the expenses necessary to maintain one’s business, the costs required to support one’s family or oneself, such as the purchase of medicines or medical visits.