Tax Calculation Thread

Driver1980

Thank you so much for the info !

Me2U2

Basic question on exempt income if anyone knows this area. Say you have a PAYE income, plus a sole trader income. Part of the sole trader income is exempt.

Say you take in €1K in exempt income and €1K in taxable income, both part of the same trade. €300 in expenses. I know the exempt income is still liable for PRSI and USC, so would estimate this at 9.5%.

Is the following correct:

1,000 exempt + 1,000 taxable income = 2,000 gross.

2K gross - 300 expenses = 1,700 for PRSI and USC

= €161.50 PRSI and USC.

Where I am getting stuck is where the expenses should be distributed to calculate IT on the 1K liable to it.

Is it just 2K total - 300 expenses = 1,700

1,700 - exempt 1,000 = 700

40% of 700 = €280 Income Tax?

MightyDucks

Does any body know how I can calculate my income tax from a second job?

SureYWouldntYa

https://www.boards.ie/discussion/comment/117994853#Comment_117994853

You could put salary from first job into a tax calculator, then put in the second on top. The difference in tax from the two results will be the tax from the second job.

Geuze

https://www.boards.ie/discussion/comment/117994853#Comment_117994853

Apply your marginal tax rate to the income from the second job?

yellow hen

My tax bill for 2020 is 1900. For the preliminary tax (this isn't my first year of trading), am I paying 90% of that €1900 or is it 90% of my 2019 tax bill?

SureYWouldntYa

https://www.boards.ie/discussion/comment/118012648#Comment_118012648

You pay 90% of the current year, (2021), 100% of the previous year (2020), or 105% of the pre-preceeding year (2019). Pick whichever one is most advantageous.

yellow hen

https://www.boards.ie/discussion/comment/118013605#Comment_118013605

Can I say none?! I finished it today and paid 90% of last years. Thanks for the help here.

robnet77

I bought some shares this year via De Giro, first time trader.

How do I declare the shares I bought to the Revenue? Will De Giro issue a report in time for my declaration?

I'm not sure I will sell any for the time being, but I recall reading I need to declare what I own anyway.

Thanks.

SureYWouldntYa

You don’t need to do anything if you have just purchased the shares

There are only two events where you will need to report anything to Revenue, when you receive a dividend, and when you sell the shares

You can declare the dividends on your Form 12 at the end of every year, should you receive any, and pay any tax liability therein.

If you sell the shares, you would need to file a form CG1 (the deadline depends on when you sell the shares), this will enable you to either pay for the capital gain (should it be above the €1,270 yearly allowance), or notify Revenue of the loss and it can then be carried forward for future years.

robnet77

https://www.boards.ie/discussion/comment/118126103#Comment_118126103

Thanks!

I just noticed I did receive some dividends, although they're only a few cents.

Should I fill Form 12 at the beginning of 2022 then?

SureYWouldntYa

https://www.boards.ie/discussion/comment/118128728#Comment_118128728

Yeah thats what you’re supposed to do, interest and penalties will apply if you dont, the few cents you might owe might even turn into a euro in 5-10 years

doyler58

About me first: I've spent most of my adult life in the UK, and only ever paid UK tax. At some point I'll be returning to Ireland to help look after a relative. But I'm trying to work out if I'll have enough to live on.

I'm retired now (I'm 63), and all my income is from the UK. It's about €14k net property income, and about €19k gross from a company pension.

I want to know: would I have to pay PRSI and the Universal Social Charge? These things pop up when I try to use one of those tax calculators. I'm guessing that the PRSI is the Irish equivalent of the UK's National Insurance contributions, but I've no intention of applying for Irish state pension (I'll be getting a UK state pension soon). I've no idea what the Universal Social Charge is but I guess from the name that everyone has to pay that. But I just want to check these things first before deciding when to move. From my rough calculations it looks like I'd pay about €1200 a year more in tax and other contributions. And of course I'll have to pay for a health plan on top (which I think requires a separate thread) as I would not be able to access the NHS.

Sono Topolino

You will be subject to Income Tax, USC and PRSI on your UK company pension and UK rental income.

Your UK state pension may push you into the higher income tax bracket of 40%, but it will entitle you to claim the PAYE credit. It also will not be subject to USC - as it is a foreign state pension.

Once you turn 66, you will be exempt from PRSI. Reduced rates of USC also apply from the age of 70.

I have prepared the below rough tax calculation based on the income you are earning now.

Income tax €33,000 @ 20% = €6,600

Single person's tax credit: €1,700

Income tax = €4,900

USC:

€12,012 @ 0.5% = €60.06

€8,675 @ 2% = 173.5

€12,313 @ 4.5% = €554.09

Total USC = €787.65-

PRSI

€6,600 @ 4% = €924

Total tax, USC and PRSI €6,611.65

delta_bravo

This is a bit of a niche question I think. I work for a multinational and we get a share purchase scheme. Basically you portion away some of your net salary and shares are purchased at a 15% discount (tax due on the discount). You're allowed spend up to 15% of your salary on this scheme. I cannot afford to do this as I also contribute to my pension scheme putting aside around 12% of my salary for this so I do around 5% net for the shares.

However I got an idea in my head, what if I reduced my monthly pension contributions and maximised the share purchase scheme. I would then sell the shares and use the proceeds to do an avc and get my pension tax relief. However I've no idea how I can calculate whether this makes financial sense or I'm losing money if I did this. I'm not even sure this makes sense to explain!

SureYWouldntYa

Are you allowed sell the shares immediately? Typically when a company offers shares to their staff at a discount they have to be held for 12/24 months

If you are then I believe your plan would work

delta_bravo

Thanks for the reply. Yes it is possible to sell immediately to guarantee at least a 15% profit less the tax. Just need to make sure I have the discipline to actually put all the money in the pension myself!

https://www.boards.ie/discussion/comment/119003562#Comment_119003562

Don't forget to complete your RTSO1 within 30 days of availing of the share options, pay the income tax due and you've to file a Form11 for that year of assessment and declare your shares disposed of.

delta_bravo

Thanks yes I do it. It's a pain but I do it. I feel in the future that's going to be a big area for revenue to investigate. Lot of people not doing it

https://www.boards.ie/discussion/comment/119004795#Comment_119004795

Oh it absolutely will. All the employers have to file a return with Revenue each year with details of the share options, PPS numbers of the employees receiving them, values, etc. Open goal for Revenue to investigate.

Brego888

Can anyone help me roughly calculate my capital gains tax bill on the sale of my property?

I will be engaging an accountant to look over this for me and help with my allowable deductions but I'm keen to know the ball park figure.

Bought August 2014 - €210,000

Sold June 2022 - €300,000

Primary residence Aug 2014 - Jan 2020 (5 years 5 months or 65 months)

Rented Jan 2020 - June 2022 (2 years 5 months or 29months)

Allowable deductions (solicitors fees purchasing and selling, Estate agent fees etc) roughly calculated for simplicity sake - €10,000

Profit on sale €90,000 - €10,00 allowable deductions = €80,000 that should be taxable for cgt.

CGT is 33%

So the bit I'm struggling to get my head around is working out how much is taxable based on the years that it wasn't my primary residence.

Am I correct in saying that I only pay cgt proportionally for the period it was rented out?

So hear comes the back of the cigarette box calculations.

€80,000 ÷ 94 months (total ownership) x 29 months (period not primary residence) = €24,680

33% of 24,680 = €8144

Is my CGT bill likely €8144 or have a calculated this way off?

namenotavailablE

You're almost right but a few positive things will reduce your tax bill:

1. You're allowed treat the last 12 months of ownership as a period of residence so that brings the 29 months down to 17.
2. You can claim an annual exemption of €1270 against the taxable amount of the gain (80000 x 17/29)

See here: https://www.revenue.ie/en/gains-gifts-and-inheritance/cgt-reliefs/principal-private-residence-ppr-relief.aspx

Donutz

Hoping somebody can help.

My wife and I are jointly assessed. As my wife is a stay at home mother, I was the only one earning a wage and was in the 20% tax band for the first 48000

My wife was awarded carers allowance and declared this to revenue this morning. Since then though, when I log on to my revenue account it says that my 20% rate is only up to 28000. My wife's account doesn't have a band.

I'm hoping that this is only until somebody reviews the information that my wife has sent them and that I will be put back on the 48000 band and my wife will get the 28000 band.

Please tell me if I am missing something.

ari101

Carers allowance is taxed by reduction of tax band and credits, but the amount/allocation of the change seems high.

Has a new tax credit cert issued in your Revenue MyAccount - that should show the amount deducted and why, does this agree to the rate she has been approved for.

You can contact revenue and query if it doesn't add up. I would expect to see her band reduced noticably and the tax credits needed to cover it could spill over into those allocated to you also.

Donutz

https://www.boards.ie/discussion/comment/119546127#Comment_119546127

There hasn't been a new tax cert issued yet. As we are jointly assessed I can look at her tax details when I log on to my account and it doesn't have a tax band for her. It's just blank.

Tried ringing but as soon as the lines open there is a recorded message saying they have a high volume of callers waiting and can't take my call.

I've left a message on the enquiry part of the site but am still waiting to hear back.

I assumed once she was granted carers allowance we could earn up to about 70000 in the lower band.

As it stands now, we could nearly be worse off.

Edit: I've just recieved my amended certificate and the have reduced my band by the same amount that my wife would receive from her carers grant in a full year.

Should it not get reduced by the amount she will receive this year?

Plus, should she have her own tax band?

Sounds like an error on Revenue side. You should still have your standard tax band to €45,800. Was she claiming the home carer tax credit before being granted the carers allowance? Stay on the phone to Revenue, they'll sort it out quickly for you.

Donutz

https://www.boards.ie/discussion/comment/119546424#Comment_119546424

After speaking to somebody in revenue it seems that they have reduced my 20% band by 17342 whice is the amount of carers allowance that my wife would receive in a full year even though she is only gonna receive about 3500 this year. They said that they couldn't ammend their figures and I would have to claim all the excess tax that I have paid because of this in January.

I tried explaining that I probably won't earn a wage for the next few weeks because of this and he basically said tough **** and to claim it all back in January.

SureYWouldntYa

You could easily get a different response from someone else if you ring again with Revenue, they seem to just want to get you off the phone asap

I'm surprised they've reduced it by the amount as if she was to earn it for a full year, at least the weekly rate from now until the end of the year would make some sense

I'd try ringing again if you can, you could get someone more helpful

ari101

Maybe ask to be put on a week1/month1 basis if they can't amend the amount til year end. Then at least you won't lose all pay in a cumulative catch up...?

Donutz

https://www.boards.ie/discussion/comment/119556405#Comment_119556405

My amended tax certificate actually says its for the period 30 August to 31 December on a week 1/ month 1 basis.

Wasn't quite sure what it ment but after having a quick Google it seems I might not get screwed over for the next few weeks.