Return to work - how does it affect spouse's tax

betty63

I hope to return to work after a break of 12+ years, during which time I wasa full-time parent. In that time, I've had zero earning, have not been on any social welfare, etc. Husband pays all the tax/prsi/ etc on his earnings and has the Tax Credits etc. We're fortunate that he's on the higher tax band. The type of work I hope to take on will be part-time & not a huge rate of pay...

Am wondering how will my future return to work affect spouse's tax situation?
Would it be better to be Joint Assessed or Singly assessed for tax?
It'll affect the home carer’s tax credit if my income exceeds €7,200 in the tax year but what other issues are there to consider
Am a bit out of touch with this general area, so am really grateful for any opinions and thoughts, thanks

gerrybbadd

betty63 wrote: »

I hope to return to work after a break of 12+ years, during which time I wasa full-time parent. In that time, I've had zero earning, have not been on any social welfare, etc. Husband pays all the tax/prsi/ etc on his earnings and has the Tax Credits etc. We're fortunate that he's on the higher tax band. The type of work I hope to take on will be part-time & not a huge rate of pay...

Am wondering how will my future return to work affect spouse's tax situation?
Would it be better to be Joint Assessed or Singly assessed for tax?
It'll affect the home carer’s tax credit if my income exceeds €7,200 in the tax year but what other issues are there to consider
Am a bit out of touch with this general area, so am really grateful for any opinions and thoughts, thanks

It would only affect your husband's income if it were a thing that you were to take back the portion of tax credits, and standard rate band, that he has belonging to you (Assuming you are jointly assessed)

The income threshold for home carers has increased to 10,000. You should note however that, when claiming this credit, you are not allocated a rate band in your own right, and your income would be subject to income tax at 40%.

If you were never to go near your husband's allocations, you would still have the PAYE tax credit in your own right, which is non transferable between spouses. This amounts to 1650 per year, effectively reducing your tax liability by this amount (credit is restricted to tax due, so if your tax bill is 1000, then this is the amount of credit you will be allocated)

betty63

Thanks a mill for your reply - really appreciate it. Have to admit I'm a bit dense when it comes to tax. I will have to re-read what you've told me as I find this area confusing. I need to get my act together and educate myself on this and study the Revenue.ie website . Any other websites out there which are useful e.g. "tax issues for dummies" ?
I don't want to post too many stupid questions and drive everyone mad... Thanks

gerrybbadd

betty63 wrote: »

Thanks a mill for your reply - really appreciate it. Have to admit I'm a bit dense when it comes to tax. I will have to re-read what you've told me as I find this area confusing. I need to get my act together and educate myself on this and study the Revenue.ie website . Any other websites out there which are useful e.g. "tax issues for dummies" ?
I don't want to post too many stupid questions and drive everyone mad... Thanks

Ask away - sure that's what the forum is for.

You might find some calculators on Accountancy firms websites that may be of use to you. Revenue's own website is good, but can be a bit technical or confusing.

The Citizen's advice site is a good place to visit too