Simple question needs straight answer

mcneil

If I'm self employed as a sole trader and after my out goings, I've only earned 19k euro, I don't have to pay income tax at 20% but if I go over 20k, I have to pay 20% of anything I draw from my account.

relax carry on

mcneil wrote: »

If I'm self employed as a sole trader and after my out goings, I've only earned 19k euro, I don't have to pay income tax at 20% but if I go over 20k, I have to pay 20% of anything I draw from my account.

Not sure where you are getting that.

You are taxed at 20% on your taxable profit up to 33800 and anything above that is at 41%. You then take your applicable tax credits from gross tax due to arrive at the tax you are due to pay.
In your case it's 19000 * 20% which is 3800 due less your single persons tax credit of 1650 which is 2150 to pay. If you are married and jointly assessed then you may have another 1650 of a tax credit to use if your spouse isn't using it.

You also will have USC and PRSI to pay.

mcneil

relax carry on wrote: »

Not sure where you are getting that.

You are taxed at 20% on your taxable profit up to 33800 and anything above that is at 41%. You then take your applicable tax credits from gross tax due to arrive at the tax you are due to pay.
In your case it's 19000 * 20% which is 3800 due less your single persons tax credit of 1650 which is 2150 to pay. If you are married and jointly assessed then you may have another 1650 of a tax credit to use if your spouse isn't using it.

You also will have USC and PRSI to pay.

Is there not a limit one needs to live off before it's taxed. So even if I earn 7k in one year, I still get taxed 20% on it. Is this correct?

Steve

mcneil wrote: »

Is there not a limit one needs to live off before it's taxed. So even if I earn 7k in one year, I still get taxed 20% on it. Is this correct?

If you earn nothing, you still have to pay €500 prsi once you are declared as a sole trader.

Welcome to Ireland, the best little country for megacorps.

linpoo

You pay tax on your Net Profit which is your turnover (sales) minus your business costs (purchases, other expenses, motor and travel etc)

relax carry on

mcneil wrote: »

Is there not a limit one needs to live off before it's taxed. So even if I earn 7k in one year, I still get taxed 20% on it. Is this correct?

Not currently and I'm not sure if anything like that existed in the past.

On 7000 taxable profit your income tax would be 7000 * 20% less your 1650 Personal tax credit. That works out at 1400 less 1650 credit meaning zero income tax to pay. There wouldn't be any USC due but a minimum PRSI contribution would be due.

If you are self employed and are asking these types of questions please seek professional advice regarding your business and tax.

barneystinson

Steve wrote: »

If you earn nothing, you still have to pay €500 prsi once you are declared as a sole trader.

Welcome to Ireland, the best little country for megacorps.

Well isn't that a tall glass of populist hyperbole without a basis in reality...! Have a look here to see how little we tax the lower paid... http://www.taxinstitute.ie/Portals/0/Effective%20Income%20Tax%20Rates%20Ireland%20v%207%20competitor%20countries.pdf

Steve

barneystinson wrote: »

Well isn't that a tall glass of populist hyperbole without a basis in reality...! Have a look here to see how little we tax the lower paid... http://www.taxinstitute.ie/Portals/0/Effective%20Income%20Tax%20Rates%20Ireland%20v%207%20competitor%20countries.pdf

No basis in reality, really?

Can I hire you as a tax accountant please? Anything you get back from revenue you can keep....

What part of the €500 minimum PRSI obligation did I make up?

barneystinson

Steve wrote: »

No basis in reality, really?

Can I hire you as a tax accountant please? Anything you get back from revenue you can keep....

What part of the €500 minimum PRSI obligation did I make up?

The part where you said if you earn nothing you're liable for it... you must have at least €5,000 of self employed income to be liable for the minimum Class S contribution.

Did you even open the link, or are you one of those people who just chooses to ignore inconveniences like facts and evidence...

Steve

I opened your link, it has nothing to do with what I stated!

Please, I would love to not have to pay €500 if, please tell me how?

barneystinson

Steve wrote: »

I opened your link, it has nothing to do with what I stated!

Please, I would love to not have to pay €500 if, please tell me how?

http://www.welfare.ie/en/downloads/socialinsuranceandtheselfemployed.pdf

Steve

barneystinson wrote: »

http://www.welfare.ie/en/downloads/socialinsuranceandtheselfemployed.pdf

That document agrees with what I stated.

Self-employed contributions are charged at the rate of 4% of reckonable income over €5,000 or €500 per annum whichever is the greater

What point are you trying to make? your facts assumptions are wrong.

barneystinson

Steve wrote: »

That document agrees with what I stated.



What point are you trying to make? your facts are wrong.

You pay nothing UNLESS your earnings exceed €5k.

Your first post on this thread stated you pay €500 even if you earn nothing. That was wrong.

People can be wrong in asserting as fact something which isn't a fact. But facts are facts

So if you want to not pay the €500 (which, by the way, is a steal if you consider the rates of social insurance in other countries, and what entitlements you accrue for having paid it), the answer is earn less than €5k.

Steve

barneystinson wrote: »

You pay nothing UNLESS your earnings exceed €5k.

Your first post on this thread stated you pay €500 even if you earn nothing. That was wrong.

People can be wrong in asserting as fact something which isn't a fact. But facts are facts

So if you want to not pay the €500 (which, by the way, is a steal if you consider the rates of social insurance in other countries, and what entitlements you accrue for having paid it), the answer is earn less than €5k.

Sorry, you are wrong there.

I've had several accountants , tax course lecturers, and a phone call to revenue tell me otherwise.

Lockedout2

Steve wrote: »

If you earn nothing, you still have to pay €500 prsi once you are declared as a sole trader.

Welcome to Ireland, the best little country for megacorps.

Steve

I think you will have to revert to the accountants, tax lecturers and the person in Revenue and tell them that they are misinformed.

Unless a tax payer has €5,000 in income reconable for PRSI then there is no obligation on them to pay PRSI so someone with a sole trader profit of €4,900 does not pay compulsory PRSI.

There is no income tax on income of €5,000 as it is covered by tax credits and there is no USC as its below the exemption.

A taxpayer may if they so wish pay the minimum PRSI contribution but this is a voluntary system and is paid by choice.

CIARAN_BOYLE

Steve wrote: »

Sorry, you are wrong there.

I've had several accountants , tax course lecturers, and a phone call to revenue tell me otherwise.

a number of accountants will tell you that you should pay €500 in order to maintain a social insurance record but you do not have to if your income is below €5,000

Steve

CIARAN_BOYLE wrote: »

a number of accountants will tell you that you should pay €500 in order to maintain a social insurance record but you do not have to if your income is below €5,000

Actually that makes a lot more sense, thanks.

barneystinson

Steve wrote: »

Actually that makes a lot more sense, thanks.

Oh he gets thanks and I get "you're wrong"...?!

Steve

barneystinson wrote: »

Oh he gets thanks and I get "you're wrong"...?!

My apologies, you were right, and thanks.

I'm still confused as hell though, particularly about the voluntary contribution.

Lockedout2

barneystinson wrote: »

Oh he gets thanks and I get "you're wrong"...?!

Ah Barney, you are

legen. ...........

Wait for it!!!!!









dary!!!!!!!!

mcneil

relax carry on wrote: »

Not sure where you are getting that.

You are taxed at 20% on your taxable profit up to 33800 and anything above that is at 41%. You then take your applicable tax credits from gross tax due to arrive at the tax you are due to pay.
In your case it's 19000 * 20% which is 3800 due less your single persons tax credit of 1650 which is 2150 to pay. If you are married and jointly assessed then you may have another 1650 of a tax credit to use if your spouse isn't using it.

You also will have USC and PRSI to pay.

So there's me thinking and been told by others that we as sole traders are only taxed once we hit the basic wage threshold as in min wage.

So if someone is earning 10k a year then they are taxed 20% plus 500 for prsi. You'd be better on the dole if that's the case!

Stheno

mcneil wrote: »

So there's me thinking and been told by others that we as sole traders are only taxed once we hit the basic wage threshold as in min wage.

So if someone is earning 10k a year then they are taxed 20% plus 500 for prsi. You'd be better on the dole if that's the case!

No you'd have a tax credit of 1650 so you'd only pay 350 in tax

lawred2

mcneil wrote: »

So there's me thinking and been told by others that we as sole traders are only taxed once we hit the basic wage threshold as in min wage.

So if someone is earning 10k a year then they are taxed 20% plus 500 for prsi. You'd be better on the dole if that's the case!

Are you seriously a sole trader?

mcneil

lawred2 wrote: »

Are you seriously a sole trader?

A newly sole trader without an accountant just because one is a sole trader doesn't mean they know the ins and outs of the tax system.

lawred2

mcneil wrote: »

A newly sole trader without an accountant just because one is a sole trader doesn't mean they know the ins and outs of the tax system.

Best of luck with everything... you'll need it if you're not prepared to get informed

relax carry on

mcneil wrote: »

A newly sole trader without an accountant just because one is a sole trader doesn't mean they know the ins and outs of the tax system.

Then for God sake learn it. Get professional advice. You are ultimately responsible for your tax affairs. This should have been covered in your initial research into your business.