Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie
Hi there,
There is an issue with role permissions that is being worked on at the moment.
If you are having trouble with access or permissions on regional forums please post here to get access: https://www.boards.ie/discussion/2058365403/you-do-not-have-permission-for-that#latest

Preliminary tax, 90% of..

  • 22-09-2017 9:15pm
    #1
    homer911
    Registered Users, Registered Users 2 Posts: 5,163 ✭✭✭


    A bit ahead of myself but trying to help my old man with his taxes for the first time. He has accelerating dementia and I am having to step in. Preliminary tax is due next month but I'm not clear on what it's to be calculated on. He has a mix of private pension and dividend income. Is it 90% of 2017 untaxed income, 90% of total income less tax paid to date or what?

    Thanks


Comments

  • #2
    nompere
    Registered Users, Registered Users 2 Posts: 1,678 ✭✭✭nompere


    homer911 wrote: »
    A bit ahead of myself but trying to help my old man with his taxes for the first time. He has accelerating dementia and I am having to step in. Preliminary tax is due next month but I'm not clear on what it's to be calculated on. He has a mix of private pension and dividend income. Is it 90% of 2017 untaxed income, 90% of total income less tax paid to date or what?

    Thanks

    Procedures at October/November 2017:

    Step 1 - Calculate income tax for 2016, taking into account all tax credits and tax paid at source.

    Step 2 - Estimate income for 2017 and calculate tax on that figure using similar principles to Step 1

    Step 3 - Work out 90% of figure at Step 2

    Step 4 - Reduce figure at Step 1 by preliminary tax 2016, paid in October 2016

    Step 5 - Take figure at Step 3 and add figure at Step 4.

    Step 6 - Pay figure at Step 5.

    Be careful - paying the correct amount of preliminary tax is partly to protect the taxpayer from paying interest on unpaid tax. The normal way of doing this is to pay 100% of the amount of 2016 tax as preliminary tax for 2017. If you pay 100% of the 2016 liability then no matter how much the underpayment there will be no interest. If you miscalculate the 2017 liability (and the year insn't over yet, so that can be tricky) and your calculation produces a figure that is less than 90% of the ultimate liability then Revenue will charge interest on the underpayment.


  • #3
    homer911
    Registered Users, Registered Users 2 Posts: 5,163 ✭✭✭homer911


    Thanks, I think I'm with you. His preliminary tax paid last year was only about 55% of the total he had to pay for 2017 (on top of that deducted at source) but didn't get stung for interest - will be much more conservative this year


Advertisement