Joint Assessment Form - Quite confused

Sauzer

Hi all, I've been reading a lot online and in boards.ie about how to compile the Joint Assessment Form, but I'm still quite confused. I would like some confirmation/clarification from some experts it my understanding is somehow correct...

We got married a couple of months ago, I'm earning about 65K per year and my spouse is at the moment earning about 28K per year (hopefully she will get a new role soon which will increase her income to 33K). No kids, no other incomes.

If I'm not wrong, we should leave the tax credits split 50/50 between the two of us and transfer to me the difference between 28K and the cut-off point (34,550 - 28,000 = 6,550). Is this correct ?

Now, here starts my confusion. According to this website, sorry I had to bracket the URL in some points (www[.]citizensinformation[.]ie/en/money_and_tax/tax/income_tax/how_your_tax_is_calculated[.]html), quote:

"The standard rate cut off point for the couple is €43,550 plus €25,550. The increase in the standard rate band is not transferable between spouses or civil partners, so the first spouse or civil partner's tax bands would be calculated as €43,550 @ 20% = €8,710 and €4,450 @ 40% = €1,780. The second spouse or civil partner's tax bands would be calculated as €25,550 @ 20% = €5,110 and €1,450 @ 40% = €580."

Does this mean that my spouse under the Joined Assessment will pay more taxes than as single person assessed? I mean, she will pay 40% over €25,550 of her current salary, versus, paying 20% as she's under €34,550.

It looks to me she's not going to have any advantage from this, only myself will have a nice be tax relief.

Also, what's the point to transfer to me the cut-off balance if under the Joined Assessment the standard rate cut off point for the couple is €43,550 plus €25,550 ?

Thanks!

Stratvs

Think of it as a seesaw initially with €69,100 in the middle. Move €34,550 to each end and it stays balanced. That’s the way two single persons would be or where a married couple on joint assessment would be if they split the cut off point equally.

Now move up to €43,550 to one end that leaves a maximum of €25,550 at the other end. So one end swings up and the other down. You can move a bit of the €43,550 back the other way and gradually the sides come closer to balancing again. In other words when one goes up the other must come down.

Where both are earning at or above €34,550 then there is no benefit just split the cut off 50/50. If one is earning less than €34,550 then you can transfer the difference between the pay to the other. But the other can’t get more than €43,550. So your spouse ( congratulations by the way ) earning €28,000 needs that much to cover their pay at 20% but you could have €41,100 which increases your cut off by €6,550 saving €1,310pa. If your spouse pay increased to €33,000 then the most you can get in cut off is €36,100.

Say your spouse earned €18,000 then cut offs are max €43,550 to you and €25,500 to the spouse but they’d only be using €18,000 you can’t get any more of that.

Also in year of marriage you’ll still be taxed as single anyway so any joint assessment request will be from 01/01/19 but you can review 2018 after the year end and joint treatment post date of marriage may mean a bit of a refund where one spouse has unused cut off and the other has had higher rate liability.

namenotavailablE

My SRCOP allocation spreadsheet URL="http://taxcalc.eu/monthlyss/SRCOP%20allocation.xlsx"]link[/URL might be helpful too.

Sauzer

Thank you Stratvs for the explanation!