Q My daughter is returning from her J1 summer in America. She has been working since the day she arrived at the beginning of June and earns a decent amount of money. She doesn’t know anything about filing a tax return, but I’m pretty sure she’ll be eligible for a tax refund. Is this the case and does she need to make a statement before coming home?
A You’re right. According to Taxback.com executive director Joanna Murphy, there’s a good chance your daughter is entitled to a refund. And if she made more than $3,950 over the summer, she’s required to file a nonresident tax return.
While she has until April to do that, Ms Murphy advises it would be good to get things straightened out sooner rather than later, as those things tend to fall by the wayside.
She should fill out a W-4 withholding form while she’s still there, and it’s a good idea to keep her US bank account open so she can receive her refund directly into her account. She should also make a list of all work-related expenses, Ms Murphy said.
To request a refund, she needs a W2 form or final cumulative payslip and a social security number/ITIN number. She will also need an address and other contact information from her employer.
Q I am really concerned about the impact of inflation on my financial wellbeing this coming winter. Should I stop paying my personal pension to make sure I can pay my gas bills?
A While it might be tempting to consider such a drastic move, you should consider what other options are open to you before you act, according to founder of financial wellbeing site MoneyWhizz, Frank Conway.
If you haven’t already done so, you need to examine your household income and expenses in detail. On the income side, if you have any tax credits or refunds that you may be entitled to, reclaim them, Mr Conway advised. There are two parts to spending: needs and wants.
If you have any tax credits or refunds that you may be entitled to from Revenue, claim them back
When it comes to needs and if you have a mortgage, can you refinance at a better rate? Regarding the cost of groceries, can you identify food waste habits that you can eliminate? It is estimated that Irish households waste around €700 a year. The hardest part is how well you audit what you spend on desires. This includes gambling-related activities like sports betting, lottery tickets and so on, he said.
If you are either a regular or occasional smoker, work to reduce and eliminate it. If you have spending habits that allow you to park for the winter months, try this. Stopping any contribution to a private pension scheme should only be considered as a last resort.
Treat it as a necessity of life and only quit when you really have to,” Mr. Conway said.
Q I am a 30 year old single mother with a 3 year old child. I’ve been back to full time work since June this year and am considering getting life insurance but am concerned about the cost now that I’m getting full wages again. At the moment I only have about 20 to a maximum of 25 euros per month available. Should I wait until I’m 40?
A Purchasing life insurance helps keep your family financially secure and gives you peace of mind should the worst happen. How much life insurance you want to buy depends on the level of benefits you want to receive at the end of the term and also how much you can afford to contribute now, says People Insurance chief executive Paul Walsh.
Without knowing your complete data, your health situation and your financial circumstances, it is difficult to give an accurate assessment of your needs. But generally speaking, a person in your age group who doesn’t smoke and has no significant medical problems could get €250,000 worth of life insurance with standard life insurance at that premium, Mr Walsh said.
Financially, little is gained by postponing the conclusion of a life insurance policy
The insurance cover would run until you were 65 years old. Premiums would be slightly higher on a convertible policy, which is a policy that allows the holder to extend their policy past age 65 without the need for an underwrite.
Mr Walsh said that in his experience there is little to be gained financially by putting off life insurance for another 10 years.
Since the monthly premiums would then be higher, you would still be paying the same premiums in relative terms, but you would be insured for 10 years less. Talk to your financial advisor for more information, he said.
https://www.independent.ie/business/personal-finance/your-personal-finance-questions-is-my-daughter-entitled-to-a-tax-refund-after-her-summer-job-in-the-us-41995550.html Your Personal Finance Questions – Is My Daughter Eligible for a Tax Refund After Her Summer Job in the US?