Tax on grinds

confizzled

Hi,
I'm a college student who's currently taking a year out. I am considering giving leaving cert grinds this year to secondary school students in my area. I was wondering what exactly I need to do in the way of tax.

Are there any particular forms I should be filling out? I've never worked before so it's all a bit new to me. I don't expect I'd make much money. If I made just 1000 euro over the course of a year, say, where would that leave me? Am I right in assuming I'll be paying 20% tax on what I earn if I decide to do this? To be clear: I'll have no other source of income so this wouldn't be an extra job, in case that would change things.

Any help is appreciated. Thanks!

rahmalec

If you make no other money during the year and this 1000 is all, then you'll pay no tax ...

confizzled

Really? What's the cut-off point for no tax? Do I still have to fill out documentation? Thanks.

gerrybbadd

You'll have to declare the income, but it's below the threshold for tax and USC.

Assuming you're single, the basic tax credits are 1650 Personal, and 1650 PAYE

Having these credits (3300) cover you on up to 16500 income, before you pay tax

SRASE

An individual has a personal tax credit of €1,650 so they can earn €1,650/20% = €8,250 without any income tax liability.

You will pay PRSI on sole trade income if your total income is over €5,000. If you have no other income apart from sole trade the PRSI will be the higher of €500 or 4% of your income.

You pay USC on any income above €12,012

confizzled

gerrybbadd wrote: »

Having these credits (3300) cover you on up to 16500 income, before you pay tax

SRASE wrote: »

An individual has a personal tax credit of €1,650 so they can earn €1,650/20% = €8,250 without any income tax liability.

You will pay PRSI on sole trade income if your total income is over €5,000. If you have no other income apart from sole trade the PRSI will be the higher of €500 or 4% of your income.

You pay USC on any income above €12,012

Thank you for the help, but I'm still a little confused. I see now that I won't have to pay tax since there's no chance of me getting 5 grand. But I am confused by these two separate comments when I would have to start paying tax and I'd like to know for future reference. I'd have to start paying PRSI after 5000 euro but then that will end up being nothing until over 8,250 due to tax credits?

So I won't have to pay tax, but I need to declare my income. What forms do I need exactly? From what I can tell, I need to fill out a TR1 form now and a "Form 11" and the end of the tax year*, is that right?

*the date I need to send it in before is October 31st? Ideally by August 31st? And that covers what period exactly? Sorry if I'm wrong here, it's all a bit confusing.

Thanks.

CIARAN_BOYLE

If less than 3000 you can avoid a tr1 and fill out a form 12 instead of a form 11.

We have three different tax systems in Ireland that people are liable to pay taxes.

PRSI (you can avoid til €5,000)
USC (you can avoid unless you go over €12,012)
PAYE (you have €1,650 tax credits.

Form 11/form 12 goes in before 31 October 2015 for income earned from 1 January 2014 to 31 December 2014. (I refuse to confuse you by suggesting differing accounting periods and commencement rules)

prettyrestless

confizzled wrote: »

Thank you for the help, but I'm still a little confused. I see now that I won't have to pay tax since there's no chance of me getting 5 grand. But I am confused by these two separate comments when I would have to start paying tax and I'd like to know for future reference. I'd have to start paying PRSI after 5000 euro but then that will end up being nothing until over 8,250 due to tax credits?

So I won't have to pay tax, but I need to declare my income. What forms do I need exactly? From what I can tell, I need to fill out a TR1 form now and a "Form 11" and the end of the tax year*, is that right?

*the date I need to send it in before is October 31st? Ideally by August 31st? And that covers what period exactly? Sorry if I'm wrong here, it's all a bit confusing.

Thanks.

Any income you earn in 2015 will have to be returned by 31st October 2016.

You are liable for three different things - tax, PRSI and USC. All three are separate.

You pay PRSI when you earn over €5000.
You pay tax when you earn over €8250.
You pay USC when you earn over €12012.

If you are earning (for example) €2000 in 2015, you will not owe anything but will still have to complete the form to inform Revenue of your earnings.

confizzled

CIARAN_BOYLE wrote: »

If less than 3000 you can avoid a tr1 and fill out a form 12 instead of a form 11.

Form 11 - Have to have done a TR1
Form 12 - Don't have to have done a TR1
Is that right? Are they otherwise equivalent (for my situation)?

How is it that I can skip the TR1? I won't go above 3000, but what if someone wasn't sure in advance? How would they know whether to do a TR1 or not then?

CIARAN_BOYLE wrote: »

Form 11/form 12 goes in before 31 October 2015 for income earned from 1 January 2014 to 31 December 2014.

prettyrestless wrote: »

Any income you earn in 2015 will have to be returned by 31st October 2016.

I see, thank you both. So if, for example, I worked from September to May, I'd send one in in 2016 covering Sept-Dec of 2015 and then I'd need to send in another in 2017 covering however much I worked of 2016?

prettyrestless wrote: »

If you are earning (for example) €2000 in 2015, you will not owe anything but will still have to complete the form to inform Revenue of your earnings.

That's fine, thank you!


I'd like to thank everyone for answering all these questions. Apologies if it appears at any point as if I'm asking you to clarify things you've already made clear. I just want to make sure I get this right.