RAC contributions are deductible, within limits, for: (i) income tax (ii) USC (iii) PRSI:

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Prepare for the QFA Pensions Exam 1. Use flashcards and multiple choice questions with detailed explanations. Secure your success with our comprehensive study tools!

Multiple Choice

RAC contributions are deductible, within limits, for: (i) income tax (ii) USC (iii) PRSI:

Explanation:
RAC contributions attract tax relief by reducing the amount of income tax you owe, within the Revenue limits for pension relief. The relief is delivered either at source by the RAC provider or by reclaiming it through your tax return, and it specifically lowers income tax. USC and PRSI are separate charges on earnings and are not reduced by pension contributions, so they don’t benefit from this relief. In short, pension contributions reduce income tax only, subject to the allowable limits.

RAC contributions attract tax relief by reducing the amount of income tax you owe, within the Revenue limits for pension relief. The relief is delivered either at source by the RAC provider or by reclaiming it through your tax return, and it specifically lowers income tax. USC and PRSI are separate charges on earnings and are not reduced by pension contributions, so they don’t benefit from this relief. In short, pension contributions reduce income tax only, subject to the allowable limits.

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