Taxation as a married couple

m_stan

Any assistance on the following would be very welcome.

Since I was married this year, I now need to notify the revenue about what way we wish to be assessed in the next tax year, from Jan 1st.

As a guide, I am paid around 4x what my wife is since she only works part time.

My gut feeling is that Joint Assessment is the way to go and that I should be the 'assessable spouse' and receive all the tax credits, as I earn the higher salary.

Am I correct ? Is is safe for me to presume this is the most tax efficient way to proceed simply on the basis that I earn much more ? Or am I missing something ?

Many thanks

m_stan

*bump*

m_stan

nobody has any ideas ?

themadchef

My situation is different in that we both earn roughly the same amount so we split it.

I suppose if it was me i would ring the tax office for advice. They really dont want you paying anymore tax than you need to as most people will reclaim it in the balancing statement at the end of year anyway.

If you take all the allowance she will pay tax on her wages in full (i think). So as far as i can see it boils down to how much she's going to get paid in this part time job and if her taking the allowance is worthwhile. If its a decent part time job (apart from the financial aspect of things) it will be sickening for her to see the tax man rape her pay cheque every week and may put her off as she may see it (as i probably would) as working for nothing....if you kno what i mean.

My advice...ring the friendly tax man lol.

Best of luck
Katrina

The_Conductor

The Revenue Commissioners have a booklet detailing the ins-and-outs of being assessed as a Married Couple- if you ring your local tax office they will send a copy out to you.

I would suggest leaving all your wife's tax credits with her- but possibly transferring some of her tax band over to you (you pay tax at 20% on the first roughly 33k and 42% thereafter). Work out what her expected income is- and while leaving her credits with her- transfer the remainder of her 20% band over to yourself increasing the amount of money you earn on the lower band, without impacting on her take-home pay. It works out very well in a situation such as you are describing (but if her income increases- you better move her band back to her, to reflect this- or she hits the 42% band before you know whats happened and is deeply unhappy with you......)

SarahMc

You can't transfer credits anyway. I would transfer all of her allowance to you.

shayser

I transferred my wife's credits to me, thinking it would mean more take home pay, but it made no difference. Didn't know about the transferring the tax band. Must enquire.

Macker18

Anything here

Remember they are talking about 2006 and Std Rate cut off point SRCOP but the principal is the same.

Mr. Incognito

For a year of marraige you can elect to be jointly assessed from the date of marraige. You need to submit your marraige cert to your local tax office. TVH there rarely is a benefit in remaing seperately assessed unless your spouce's income is greater than the income tax band.

For 2007 your band is 34,000+ your wifes income. (up to a max of 68,000 as you are a two income couple)

Up to this amount is taxed at 20% and the excess at 41% and then your credits are deducted.