Tax question

rondeco

I just got married a few months ago and got a letter from the revenue mentioning the tax free allowance for a single person is 1500 pa and for a married person its 3000 pa. My wife is working aswell so if we inform the revenue we are married do we both get the increased tax allowance?

Appreciate the help.

kluivert

I think you have your tax credits mixed up with the idea of your tax bands.

These are the figures for 2006:

Tax Credits (Allowance)
Married Tax Credit €3260
Paye Credit x2 €2980 (Both Working)

Tax Bands (Both spouses working)
First 41k @ 20% with an additional max of 23k @ 20% (64k @ 20%)
Balance at 42%.

You may have to notify your local tax office of a change to your status ie Married and both earners.

Then decide if you want your credits divided 50/50 between both employments or divide the credits in proportion with your incomes, so who ever earns the more will get more tax credits etc.

I hope that helps.

Saruman

I was married in aug 2004.. afaik you have to wait a year before you notify them anyway.. i could be wrong.. i have not bothered myself yet, im not sure its any benefit unless only one of you in full time employment in which case one can use the others tax credits also.

Im probably wrong though.. any married people out there who earns a similar wage to their partner know?

gerrycollins

Saruman wrote:

I was married in aug 2004.. afaik you have to wait a year before you notify them anyway.. i could be wrong.. i have not bothered myself yet, im not sure its any benefit unless only one of you in full time employment in which case one can use the others tax credits also.

Im probably wrong though.. any married people out there who earns a similar wage to their partner know?

no tell them asap but you will not be able to do anything until the end of the tax year
I got married last sepetember and told the tax man in october and yesterday we got our new tax details.
they are effective straight away but for sept to dec last year we have to produce our P60 and the tax man will figure out what we are due back.I worked it out at a about €200
When both are working each has the same tax credit ie.3260 divided between both but the cut off point can be adjusted depending onwho earns more so that you can reduce your overall tax from both
My situation is that my wife earns less than me so her cut off is only a few hundred over what her annual wage is so she only pays 20% tax on what she earns
The rest goes to me so that i pay my 20% and then the amount i pay 24% on is reduced.any further increases through subsequent years will be adjusted accordingly with our current break down
If at any stage one spouse gives up work your tax cut off reduces to the first cut off of 41K but you lose the remaining 23k so then you can take the other tax credits and add them to yours but i think this can affect and claim on social welfare that the out of work spouse claims
the only way i figured this out was to go and visit my local tax office the revenue site leaves lots of questions to be answered

rondeco

thanks very much for the help folks. its very much appreciated.