First time Rental Income

Shannonsider

My wife and I have received rental income since February 2013. We are taxed as individuals and are both PAYE earners.

As this is our first year receiving rental income:

- is the self assessment deadline of 31 October just in respect of pure rental income (i.e. do we need to include our paye income to get an overall tax liability/refund?)

- is our obligation just to register for rental income by 31 October & then pay & file by 31 October 2014?

- do we have to pay any tax by 31 October?

- do we need to calculate a tax liability at 31 October (assuming rent for the remainder of the year?)

- as the rented property is in both our names, do we both need to register for rental income (or can one of us elect?)

- do we both need to pay any tax liability or can one of us elect to pay it?

Thanks for any help folks

Bobby1984

31st October is the deadline for 2012 income tax returns. Rent received for 2013 will be returned next year.

Why are you not jointly assessed? More benefits such as being able to transfer unused credits and more advantageous use of the different tax bands.

Remember to keep all receipts as you will be needing them next year. Also register the tenancy with the PRTB if you havent already in order to claim mortgage interest (if you have one) against the rental income.

Shannonsider

Thanks for the response Bobby.

We only got married this year so haven't looked into joint asessment. I had always assumed that joint assessment was only advantageous where one was earning & one wasn't or where one's income was much higher than the other - we both earn roughly the same.

So I can put my feet up for another year from a tax point of view :cool:

Citizenpain

yes - just make sure you are PRTB registered and keep receipts as per Bobby

Bobby1984

You can put your feet up but just remember that you will need to pay the tax liability next year and also preliminary tax for the following year. You might want to start saving a small amount monthly so you are not hit with a large tax bill next October.

Shannonsider

Thanks - is there any online calculator that could work out how much tax we are liable for (so as to help us save up)?

So we will have to pay 2013 tax liability & preliminary tax for 2014 in one installment next year or it preliminary tax in November 2014?

Citizenpain

Assuming you both pay tax at the higher band

Rental income
- 75% of Mortgage interest*
- Other Expenses
- Capital Allowances
= Taxable income

Tax, PRSI & USC are 52% of this figure

* only allowed claim if you are PRTB registered


http://www.revenue.ie/en/tax/it/leaflets/it70.html

pconnolly79

One thing I notice these days is a lot of people renting out their family home and forgetting to notify the Revenue to cancel any mortgage interest relief on the loan from the time the property became a rental property. Just to bear in mind if this applies to you too.