earn money without paying tax?

katy67

Hi, have been ask to look after a child for 1 day a week during school days from next sept on. The mother wants to pay me monthly by cheque (around 200e a month). Do l have to declare tax and how much can l earn before paying tax? My husband works and pays tax. Also we have a medical card and l'm worried it will affect that.
l do know how much my husband can earn and his tax but l just want to know basically, for myself, can l earn money without paying tax. lt will only be about 1800 a year

tatli_lokma

Probably on those earnings you won't pay tax, however you would still need to declare the income and submit a return each year. Also bear in mind PRSI contributions etc. You would need to register as self employed as far as I know. Also, if you are looking after the child in your home or their own home might have implications - not only for tax, but for insurance etc.

As for the medical card, there are ways to return to work and retain some benefits such as the medical card for a certain period of time. See here:
http://www.revenue.ie/en/tax/it/credits/long-term-unemployed-return-to-work.html

Personally, I know that it is a very small amount, but if it were me I would still declare it. Even if you do have to pay tax (your husband's income and tax credits will affect how much you can earn tax free) it will be a very minimal amount. The person paying you might decide to claim for this expense on their own tax claims, and so it would be better to be upfront from the start and pay the little or no tax than have them audit you, which is a much more daunting and stressful thing to face than a yearly return.

Mrs OBumble

In the back of my mind, there's something about a certain amount of income being tax-exempt when it's for childminding. I don't have time to Google it myself, hopefully someone does.



And I need to say this too:
OP, in general, you need to declare what you earn. Fine to ask for ways to manage this ... but please don't ask us to help you do illegal things

katy67

Sorry Mrs Bumble, l wasn't aware of doing that, l just didn't think.
There is so much info and l was very confused. It was more to do with the medical card as l was afraid if we go over the limits, we lose it otherwise l would have no problem paying tax. l will google about childminding thanks though.

Thanks Little Ted for your info and the link, it did help alot:)

f mac

Mrs OBumble wrote: »

In the back of my mind, there's something about a certain amount of income being tax-exempt when it's for childminding. I don't have time to Google it myself, hopefully someone does.

http://www.paylesstax.ie/77-Tax-Credits--Reliefs-Income-Tax-Exemption-for-Child-Minding-Services

Dietsquirt

I wonder how many taxi drivers report all their earnings. Not bitching, just curious.

StillWaters

You won't have to pay tax. You can earn €15k tax free as a Childminder. You should make a voluntary PRSI contribution. I think it's €253 a year, but it keeps your pension and maternity benefits up to date. A great investment.

Childminding.ie

Calgary22

Say nothing about it **** it this country's a joke your entitled to it you have probably been shafted by the government more then once so call this payback; -)



MOD-NOTE: Please do not advise illegal actions.

paul71

StillWaters wrote: »

You won't have to pay tax. You can earn €15k tax free as a Childminder. You should make a voluntary PRSI contribution. I think it's €253 a year, but it keeps your pension and maternity benefits up to date. A great investment.

Childminding.ie

Correct once you do it from your own home.

If you care for the child in their own home it is taxable at your marginal tax rate which in the op case would be the highest rate her husband pays tax at. If the earnings take the combined earnings above the 20% tax band then the balance would be taxed at 42% plus PRSI and USC.

Warning tax evasion is a criminal offence and if you are caught you will also pay much more in interest and penalties then your original tax bill would have been.

ted1

If you are going to be doing it for a few years it is worth you while paying the PRSI

Jim2007

Dietsquirt wrote: »

I wonder how many taxi drivers report all their earnings. Not bitching, just curious.

That's the thing about stats, if you're not in sync with the rest you stick.

If you've two drivers in a town reporting an income of say 20K and one reporting only 17K, guess who gets investigated........ So unless the boys are very coordinated it is not so easy to do.

washman3

Dietsquirt wrote: »

I wonder how many taxi drivers report all their earnings. Not bitching, just curious.

They just buy Bulgarian apartments instead...;)

DerryRed

My wife is thinking of taking up childminding. I work full-time and a small portion of my earnings falls into the 42% plus USC net.

Even if my wife earns less than €15,000 per year will we still end up paying 42% plus USC on what she earns, given that my wages already have us in that bracket?

tatli_lokma

DerryRed wrote: »

My wife is thinking of taking up childminding. I work full-time and a small portion of my earnings falls into the 42% plus USC net.

Even if my wife earns less than €15,000 per year will we still end up paying 42% plus USC on what she earns, given that my wages already have us in that bracket?

See paul71's reply below - it appears that whether the child minding takes place in your own home or the child's home is relevant.

paul71 wrote: »

Correct once you do it from your own home.

If you care for the child in their own home it is taxable at your marginal tax rate which in the op case would be the highest rate her husband pays tax at. If the earnings take the combined earnings above the 20% tax band then the balance would be taxed at 42% plus PRSI and USC.

Warning tax evasion is a criminal offence and if you are caught you will also pay much more in interest and penalties then your original tax bill would have been.

for further clarity, Revenue would be able to confirm with certainty. They are usually very helpful in regards to providing information on matters such as this.

Mrs OBumble

It also depends on whether you are jointly or separately assessed for tax. You could choose to switch to singly, you would pay more tax, she would pay none.

The_Conductor

StillWaters wrote: »

You won't have to pay tax. You can earn €15k tax free as a Childminder. You should make a voluntary PRSI contribution. I think it's €253 a year, but it keeps your pension and maternity benefits up to date. A great investment.

Childminding.ie

It increased in last years budget- its now EUR500 per year. Also- its a flatrate PRSI deduction- its not voluntary any longer. You can only earn EUR15k tax free as a childminder- if you're registered with the HSE and mind the children in your own home. One penny over- and the whole lot is taxable. All income in this category- regardless of how much, or how little (or whether any income tax is due on it, or not), must be declared to the Revenue Commissioners in an annual tax return.

With respect of your medical card- your joint income will be assessed with your husband.

The income, after income tax, PRSI and USC, must be under

€266.50 (allowance for you and your husband)
+ €38 (per child under age of 16 for first 2 children)
+ €41 (for third and subsequent children under 16)

Allowances for Mortgage payments, term loans used for home improvements and/or childcare, and mileage for your husband if he drives to work @ 30c a km, apply also.

You would need to sit down- and plug your figures into all of this and see whether you're still under the threshold. Even if you do go over the threshold- you can still apply for the medical hard on hardship grounds. Also- if you're currently qualifying for the medical card on income grounds- you should ask about Family Income Support- as you most probably would also qualify for that too.