Tax Credits & Rate Bands

iba

Hi,

Would appreciate some advice on tax credits and rate bands please, as in, has we my wife and I got them split correctly i.e. to pay the least amount of tax.

Without giving exact figures our salaries are 60k and 28k respectvily.

My tax credit is €4950 (comprising €1650 + €3300)
My wife's tax credit is €1650 (comprising €1650 only)

My tax band is €41800 (comprising €23800 + €18000)
My wife's tax band is €23800 (comprising €23800 only)

So should we move any of our tax credits or our rate bands around please?

See attach. doc. for further details.

Regards

Iba

namenotavailablE

Based on your income figures there's no tax saving achievable by shuffling the allocated values around.
You can change your individual net incomes by so doing (e.g. give a SRCOP of €28000 to your wife and reduce your own amount accordingly) but the total combined net will remain the same overall.

Check my tax calculator in my signature (you'll see it when logged in only, otherwise go to my 'About me' section of my profile) if you want to play around with the possibilities.

iba

namenotavailabl wrote: »

Based on your income figures there's no tax saving achievable by shuffling the allocated values around.
You can change your individual net incomes by so doing (e.g. give a SRCOP of €28000 to your wife and reduce your own amount accordingly) but the total combined net will remain the same overall.

Check my tax calculator in my signature (you'll see it when logged in only, otherwise go to my 'About me' section of my profile) if you want to play around with the possibilities.

Thanks Namenotavailable,

I checked out ur calculato, but it dosent want to open here in work - Ill have a look at it again when i go home.

I was a bit worried that I was/we were not utilising the the left over bit of my wifes tax band (i.e. her tax band is 32800 minus her salary of 28k leaves 4,800 left over (if my understanding is correct) and I couldnt tell if this leftover portion had been allocated to me).

So in ur opinion, I should just leave all the figures alone/all the shared amounts alone and leave everything as they are?

Regards

Iba

namenotavailablE

I was a bit worried that I was/we were not utilising the the left over bit of my wifes tax band (i.e. her tax band is 32800 minus her salary of 28k leaves 4,800 left over (if my understanding is correct) and I couldnt tell if this leftover portion had been allocated to me).

Your current allocation means that you have taken the maximum amount of cut-off and your wife takes the remaining balance. Between the two of you you are claiming the total of €65600 which is itself the maximum that you can claim. Basically, in a sense, you could think of it as your spouse having 'sacrificed' some of her cut-off to you (€9000)- you could both have taken €32800 but in fact have taken €32800 + €9000 [you] and €32800 - €9000 [your spouse].

The calculator requires macros to be enabled- might be a workplace restriction. Also, there are 2 such calculator files- an Excel 2003 version and an Excel 2007+ version. The latter won't really work in Excel 2003.

iba

namenotavailabl wrote: »

Your current allocation means that you have taken the maximum amount of cut-off and your wife takes the remaining balance. Between the two of you you are claiming the total of €65600 which is itself the maximum that you can claim. Basically, in a sense, you could think of it as your spouse having 'sacrificed' some of her cut-off to you (€9000)- you could both have taken €32800 but in fact have taken €32800 + €9000 [you] and €32800 - €9000 [your spouse].

The calculator requires macros to be enabled- might be a workplace restriction. Also, there are 2 such calculator files- an Excel 2003 version and an Excel 2007+ version. The latter won't really work in Excel 2003.

Thanks again Namenotavailable - u have really clarified it for me

I think Id better give the wife some of the tax band back - Im feeling guilty now - so ill increase my wifes from her current €23800 to her salary amount (and decrease the same amount from mine) - then its fair (i think)

Thanks for ur help

Regards

Iba

allthedoyles

One final point is to always request a balancing statement / P21 at year end to include any other allowances you may have accumulated during the year , like medical, work expenses , dentist ,

Union dues ( abolished in 2011 )
Wheelie bins ( abolished in 2012)
etc etc

Just bear in mind that you can go back 4 tax years .

Sometimes when you juggle your allowances between spouses , the resulting balancing statement can be beneficial .

Once again you use the online calculator to give you an idea of the outcome .