RAC contributions are deductible for tax relief on which taxes?

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Multiple Choice

RAC contributions are deductible for tax relief on which taxes?

Explanation:
RAC contributions get tax relief at the income tax level only. That means the contributions reduce the amount of income tax you owe, at your marginal rate, but they do not reduce USC or PRSI. In practice, if you contribute €3,000 and you’re in a 40% income tax bracket, you’d get €1,200 back as income tax relief. USC and PRSI are calculated on your gross income and are not reduced by this pension contribution, so their amounts aren’t directly affected by the RAC relief.

RAC contributions get tax relief at the income tax level only. That means the contributions reduce the amount of income tax you owe, at your marginal rate, but they do not reduce USC or PRSI.

In practice, if you contribute €3,000 and you’re in a 40% income tax bracket, you’d get €1,200 back as income tax relief. USC and PRSI are calculated on your gross income and are not reduced by this pension contribution, so their amounts aren’t directly affected by the RAC relief.

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