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Married persons tax question??

  • 11-12-2008 8:19pm
    #1
    Lmnover
    Registered Users, Registered Users 2 Posts: 148 ✭✭


    Hi

    Just wondering what the benefit is of registering that you are married to the tax office. My husband and I both work full time and earn over the 20% rate of tax - is it beneficial to register as a married couple or not. If so what is the benefit???

    any advice appreciated.................


Comments

  • #2
    yabadabado
    Registered Users, Registered Users 2 Posts: 16,588 ✭✭✭✭yabadabado


    when both of ye are working it wont make much difference but if either of ye werent working the other one can claim the full tax credit for a couple (i think its usually around €130 p/w).you should call revenue thet will help u out


  • #3
    Ticktactoe
    Registered Users, Registered Users 2 Posts: 765 ✭✭✭Ticktactoe


    Lmnover wrote: »
    Hi

    Just wondering what the benefit is of registering that you are married to the tax office. My husband and I both work full time and earn over the 20% rate of tax - is it beneficial to register as a married couple or not. If so what is the benefit???

    any advice appreciated.................
    If both of you are in the higher tax band then it would be of no benefit as ye would be using all of yer tax credits and rate band and therefore there would be no excess to transfer between you and your husband.

    The benefit kicks in if one spouse was in the higher tax bracket and one spouse wasn't as therefore the spouse earning the lower income can transfer their excess rateband to the other spouse,
    i.e one spouse earns 26000 and the other spouse earns 50000. The spouse earning the 26000 can transfer the excess 10400 (36400 - 26000) to the other spouse increasing their rate band to 46400 (36400 + 10400). This means that the spouse earning the 50000 would be taxed as follows:
    46400@ 20% and the remainder 3600@ 41%, which means the higher earning spouse would make a saving of 10400 @ 21% as this income should have been taxed @ 41% but is now taxed at 20% (savings of 41% - 20% = 21%)
    The saving with the tax credits been transfer only works if one spouse was earning less than 18300 as 18300 @ 20 % = 3660 which is cover by the personal tax credit and paye credit of 1830 and 1830.

    Hope this makes sense! :)


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