Married V Single rate

Wexford96

Hi
Ive just had my accountant compute the tax I owe on rental income. I work fulltime in Ireland therefore the rental income has been taxed at 48.5%.
Accountant mentioned doing an AVC which will reduce my tax bill. Ive just realized that I have never informed him that my marital status changed to married in 2017. Would this lead to a reduction in my tax bill? Is it worth informing him? Thanks.

SouthWesterly

Wexford96 wrote: »

Hi
Ive just had my accountant compute the tax I owe on rental income. I work fulltime in Ireland therefore the rental income has been taxed at 48.5%.
Accountant mentioned doing an AVC which will reduce my tax bill. Ive just realized that I have never informed him that my marital status changed to married in 2017. Would this lead to a reduction in my tax bill? Is it worth informing him? Thanks.

Only if your wife could transfer her credits to you.

Wexford96

Do you happen to know anything about paying tax monthly? I got a slight shock with this tax bill and can either borrow from bank to pay it or wondering if theres a way I can pay back monthly.
Thank you.

jimmycrackcorm

Wexford96 wrote: »

Do you happen to know anything about paying tax monthly? I got a slight shock with this tax bill and can either borrow from bank to pay it or wondering if theres a way I can pay back monthly.
Thank you.

You should be putting money aside to pay the tax bills.

Sheep Shagger

jimmycrackcorm wrote: »

You should be putting money aside to pay the tax bills.

This, we have a rental property, you need to be putting money aside each month so you don't get hit for it all at once.

For the 2020 tax year you have until 31/10/21 to pay the tax man although strictly speaking you should pay provisional tax (95% of estimated liability) by 31 March each year. Not sure how strict they are on enforcement of provisional tax though.

Your accountant should be able to guide you.

Wexford96

Sheep Shagger wrote: »

This, we have a rental property, you need to be putting money aside each month so you don't get hit for it all at once.

For the 2020 tax year you have until 31/10/21 to pay the tax man although strictly speaking you should pay provisional tax (95% of estimated liability) by 31 March each year. Not sure how strict they are on enforcement of provisional tax though.

Your accountant should be able to guide you.

Thanks a mill. Some important dates in there I wasn't aware of.

CIARAN_BOYLE

Sheep Shagger wrote: »

This, we have a rental property, you need to be putting money aside each month so you don't get hit for it all at once.

For the 2020 tax year you have until 31/10/21 to pay the tax man although strictly speaking you should pay provisional tax (95% of estimated liability) by 31 March each year. Not sure how strict they are on enforcement of provisional tax though.

Your accountant should be able to guide you.

It depends on the quantity.

If the amount is significant and the interest is significant they enforce 100% of the time. If the amount is not signficnat and the interest is minimal they never enforce.

By the way the payment for preliminary tax should be by 31 October. Ie for 2020 tax preliminary is due by 31 October 2020.

Sheep Shagger

CIARAN_BOYLE wrote: »

It depends on the quantity.

If the amount is significant and the interest is significant they enforce 100% of the time. If the amount is not signficnat and the interest is minimal they never enforce.

By the way the payment for preliminary tax should be by 31 October. Ie for 2020 tax preliminary is due by 31 October 2020.

Who decides the definition of 'significant' ?

My mistake on the date for preliminary tax, this is correct althoughike I say I'm not sure how much they enforce, have never had it enforced for rental income (we have just the one property - accidental landlord stuff). Have never been chased so maybe that's classified as not significant.

CIARAN_BOYLE

Sheep Shagger wrote: »

Who decides the definition of 'significant' ?

My mistake on the date for preliminary tax, this is correct althoughike I say I'm not sure how much they enforce, have never had it enforced for rental income (we have just the one property - accidental landlord stuff). Have never been chased so maybe that's classified as not significant.

They do. It seems to change every year but if the interest on the preliminary tax would be over 500 it seems to be enforced.

myshirt

You can't make an AVC to offset tax on your rental income.

Do you have enough PAYE income to do it against?

Sheep Shagger

CIARAN_BOYLE wrote: »

They do. It seems to change every year but if the interest on the preliminary tax would be over 500 it seems to be enforced.

Thanks, as a matter of interest any idea what level of preliminary tax would generate €500 in interest?

CIARAN_BOYLE

Sheep Shagger wrote: »

Thanks, as a matter of interest any idea what level of preliminary tax would generate €500 in interest?

Just to clarify I've seen multiple times when revenue enforce interest when the interest bill in preliminary tax is just over €500 but I dont go calculating out interest when revenue doesn't enforce so I'm not sure how universal enforcement is.

According to my maths this morning a year of preliminary tax (ie 31 October to 31 October) interest on €6,250 of income tax would be 500 exactly. Every time I've seen revenue enforce interest on preliminary tax it's been over 500 but only barely on occasion.

The interest rate is 0.0219% a day.

When the interest is significantly over 500 I believe enforcement is fully automatic.