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Preliminary Tax - how to calculate?

  • 07-04-2015 12:38pm
    #1
    newbee9
    Registered Users, Registered Users 2 Posts: 4 ✭


    Need little help with calculating preliminary tax.

    December 2013 became self-employed - Profit: 0
    December 2014 Profit 5500.

    My income tax for 2013 was 0. I should pay Preliminary Tax on 31st October 2014 and I didn't. Need to fix it
    but how should I calculate Preliminary Tax? Am I correct that I should pay 500?


Comments

  • #2
    swanvill
    Registered Users, Registered Users 2 Posts: 276 ✭✭swanvill


    Hi,
    Based on the information supplied you can pay €0 as it is 100% of your 2013 liability.


  • #3
    newbee9
    Registered Users, Registered Users 2 Posts: 4 ✭newbee9


    Thank you for reply.

    Excuse me my silly question but here I get bit confused. Preliminary tax includes PRSI so what I should have paid last October would cover PRSI for 2013 or 2014?


  • #4
    Geniass
    Closed Accounts Posts: 643 ✭✭✭Geniass


    newbee9 wrote: »
    Thank you for reply.

    Excuse me my silly question but here I get bit confused. Preliminary tax includes PRSI so what I should have paid last October would cover PRSI for 2013 or 2014?

    When you say you had a zero tax liability for 2013 do you mean zero for Income tax, USC and PRSI?

    Also, if your only income is €5,500 it's not likely you'll have any tax liability for 2014 either.


  • #5
    newbee9
    Registered Users, Registered Users 2 Posts: 4 ✭newbee9


    Geniass wrote: »
    When you say you had a zero tax liability for 2013 do you mean zero for Income tax, USC and PRSI?

    Yes.
    Geniass wrote: »
    Also, if your only income is €5,500 it's not likely you'll have any tax liability for 2014 either.

    That might be right but I am still liable to pay a flat rate social insurance contribution.


  • #6
    Geniass
    Closed Accounts Posts: 643 ✭✭✭Geniass


    newbee9 wrote: »
    Yes.



    That might be right but I am still liable to pay a flat rate social insurance contribution.

    Is this the minimum amount to qualify for the pension credit?


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  • #7
    swanvill
    Registered Users, Registered Users 2 Posts: 276 ✭✭swanvill


    @ Geniass if you earn less than €5,000 then you do not have to pay PRSI, if you earn €5,001 then you have to pay €500. Your Preliminary Tax liability is for income tax, usc & prsi.

    If you want you can pay €500 for your preliminary tax but you can just pay €0, as it is 100% of the previous years liability.


  • #8
    Geniass
    Closed Accounts Posts: 643 ✭✭✭Geniass


    Re PRSI - The OP may want to look into the below. This would still allow him the full benefit of an S class contribution.

    Reduced rate

    Persons whose annual income is €5,000 or more, who have been deemed to have no tax liability by the Revenue Commissioners, are required to pay a flat rate of €300 direct to this Department.


  • #9
    newbee9
    Registered Users, Registered Users 2 Posts: 4 ✭newbee9


    Thank you all for your input! I very much appreciate that.


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