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October 2006
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| This Month's Winner is |
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SortMyBooks - DIY Bookeeping for Business Owners |
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All of us in business know how vitally important it is to have our books in order, and even more important for us to be able to call upon information at any given time to see what is outstanding, what value of sales we have, what we owe the tax man, and much more. Many people do not get this information unless they ring the book keeper or worse the accountant, and we all know what they can charge by the hour, and that includes our phone calls.
It is an investment in ourselves and our business to streamline the accounts and find a quick and straighforward way to have information at our fingertips. One of the most straightforward and down to earth accounts trainings courses is Sort My Books. It is for the small to medium sized business, and start-ups.
The trainers, Ann & Aileen of Sort My Books, use practical, hands-on sessions to strip away the unnecessary jargon surrounding bookkeeping, accounts and tax for business owners, and reveal the beauty and value of the information underneath.
Brought down to its simplest level, see how you can set up an easy and time-friendly computerised bookkeeping system that will answer detailed questions about your business, to help you make informed decisions.
As a bonus, see how with no duplication of effort, the same easy system will keep you out of trouble with the Revenue Commissioners, have everything ready for your accountant, and give you an idea of what your tax bill is at any time.
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"I can speak from personal experience of using this software. I found most of the other products out there more complicated than necessary for sme's. I went to a 1 day course on Sort My Books, and that evening I started inputting information and was extremely pleased that at any time I could call up a summary and there was all the information I needed in seconds to have an exact picture of what state the accounts were in.
It has made VAT returns so simple and easy to do, in fact all stages of doing accounts has become very straightforward and an added bonus, it is crystal clear for the accountant and unfortunately for him, reduced his fees substantially! I would recommend this software to everyone." Mary
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Courtesy of Sort My Books
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What's My Tax?
(It's not hard, just unpleasant)
October 05, 2006 |
Whether you are an employee, a sole trader, or a director of a limited company, your income tax is calculated using the same method. There is a need to establish what exactly is being taxed (the Gross amount), what your tax credits are (mainly related to whether you are married or single, self-employed or PAYE), and what your PRSI rate should be.
So no matter what category you fall into, your income tax is calculated with the following formula: Gross Amount, minus tax, plus tax credits, minus PRSI. The only differences are the amount of tax credits, and the rate of PRSI. This is important to understand.
1. Employee Income Tax
Gross Amount is negotiated with your employer.
Tax and PRSI are subtracted from this, taking into account your tax credits. You are left with the net amount to take home. As a PAYE employee, you will get an extra 1490 (for 2006) of tax credits that the other two don’t get. You will however pay a higher percentage of PRSI.
2. Sole Trader Income Tax
Gross Amount is simply calculated as your Sales minus your Business Costs. Business Costs do not include money you took out of the business for yourself (also called Drawings) for instance to pay your home mortgage. This is important to understand. Tax and PRSI are then calculated on the Gross Amount (also called profit). Your PRSI will be lower, but also your tax credits will be lower by 1490 of tax credits that the PAYE employee gets.
3. Director of a limited company Income Tax
Gross Amount for a company director is more like that of a PAYE employee, in that a director can decide what salary she wants from the business, and that is the amount that income tax and PRSI are deducted from. The tax credits and PRSI rates are the same as that for a sole trader. If there are any profits left in the business after that, corporation tax on the businesses kicks in at 12.5%.
Use this spreadsheet to try a few figures:
www.aislingsoftware.com/selfemployedtax.xls |
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| Sort My Books |
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