Advice for landlord tax return 2018

riclad

I,m looking for info on a landlords, tax return . Lets say a landlords taxable income after expense,s is 4k , how much would the landlord pay in tax. would it be 40 per cent or 50 per cent of 4k? Does the amount of tax paid on rental income vary depending on how much the landlord earns working in retail as an employee , eg The landlord pays standard tax on salary under the paye system. if the landlord sends in a tax return doe,s he have to use tax form 12, or can he use form 11 , the self assessment tax return .

srsly78

The system does not work like that.

All income gets taxed the same.

riclad

So if the landlord earn,s 32k , as a paye employee, the 4k, will be taxed at the same rate as the income from working in a shop ?

Gileadi

In that scenario, the 4k would be taxed similar to income from the shop, you'd have the 40% marginal rate of tax, PRSI contributions and also the USC element.

Depends on his other income.

If the income is 4k* after deductions and this 4k pushes the total income (so rent received + his retail wages) above €34,550 for the year, then anything over that amount will be taxed at 40%.

So, if his retail job pays €30k and the rent pays €4k then it's all taxed at 20%
If his retail job pays €35k (about 675 per week) and the rent = €4k then €5,450 is taxed at 40% and the rest at 20%

You are correct about form 11, but these days you're better off registering for ROS and doing it all online. Much easier and can be altered if you make errors, unlike a form. It's essentially the same form as a taxi driver fills out.

*(which seems low, btw.....€330 net per month is either very low rent, or very high expenses)

sk8board

Revenue will add your total rent (not the 4K, which you say is after expenses), to your PAYE income.
you THEN deduct all expenses, and pay full income tax (paye, prsi, usc) on the remainder.

The new form 11 on the revenue site prepopulates a lot of figures now and all you need to know is the expenses, repair/maintenance receipts, and 85% of mortgage interest if applicable.
We haven’t even discussed capital allowances.

Get an accountant and then learn how to do it yourself for future years.

Gjp650

if your rental profit is under 5k, you can just do it on your form 12 as opposed to form 11?

Caranica

Gjp650 wrote: »

if your rental profit is under 5k, you can just do it on your form 12 as opposed to form 11?

Income less allowable deductions, not profit. Mortgage payments are not deductible

Gjp650

is income less allowable deductions not the same as profit? a certain percentage on the interest on the mortgage payments are allowable

Caranica

Gjp650 wrote: »

is income less allowable deductions not the same as profit? a certain percentage on the interest on the mortgage payments are allowable

Lots of posters come on here thinking if the mortgage is €1000 and the rent is €1200 that the €200 is profit and that's what may be taxable whereas it's actually the €1200 less deductions

Homer

Caranica wrote: »

Lots of posters come on here thinking if the mortgage is €1000 and the rent is €1200 that the €200 is profit and that's what may be taxable whereas it's actually the €1200 less deductions

And for most landlords year on year there really aren’t that many deductions that can be offset unfortunately!

_Brian

Homer wrote: »

And for most landlords year on year there really aren’t that many deductions that can be offset unfortunately!

Mortgage interest being the biggest I presume ?

riclad

The expense,s i am claiming for are service charge,s ,property tax, 85 per cent of mortgage interest ,cost of new oven,fridge,
i claim 1/8 of the cost of those 2 items for the next 6 years .
bought 2 years ago.
I think rental income minus deductions is the amount of taxable rental income.
The revenue ignore the mortage payments apart from 85 per cent of loan interest when calculating how much tax you will pay.
You may never make a profit on a rental unit,
but you still will have to pay tax on the rental income .

The form 12 on the online tax return app is awful,
it says, expense,s , loan interest , capital expense,s ,
its very simple and vague compared with the paper version of form 12.
There is no space to put in a brief note,
eg ,i,d like to say i,m claiming for a fridge and an oven,
12.5 per cent per year = x euros .
But if you file online, you can go into the tax return and change it ,if you made a mistake, or left something out, at least until a certain date.

riclad

So the revenue add your rental income to your salary and then the result minus the expense,s you claim are taxed .

Also they charge you 4 per cent prsi and 5 per cent usc.
the first 35 k at 20 per cent , the portion over 35k , is taxed at 40 per cent .

sunnysoutheast

Are you trying to do your tax return?

If so I'd suggest you get a professional to do this for you, the first time at least. The fee is an allowable expense against rental income.

riclad

Yes ,i know that, i was helping a friend, she has already sent in a tax return for 2018 ,using the online form a week ago.
I told her she could go to an accountant and claim the fee as an expense against rental income .

sunnysoutheast

riclad wrote: »

Yes ,i know that, i was helping a friend, she has already sent in a tax return for 2018 ,using the online form a week ago.
I told her she could go to an accountant and claim the fee as an expense against rental income .

Given what you've posted I'd say that's the best advice you can give your friend. I'd assume the return could be revised if needed after speaking to a professional.

riclad

an online return can be changed anytime, edited like a word doc,
up to the closing date, i think that date is october 30th.The thing i find strange is the online form 12 for landlords is very different than the paper
form, the paper from use,s simple language and term,s ,
It,s a lot easier to fill in than the online version .
The online form use,s certain vague wording or terms not present in the paper form.

Gumbo

riclad wrote: »

an online return can be changed anytime, edited like a word doc,
up to the closing date, i think that date is october 30th.The thing i find strange is the online form 12 for landlords is very different than the paper
form, the paper from use,s simple language and term,s ,
It,s a lot easier to fill in than the online version .
The online form use,s certain vague wording or terms not present in the paper form.

Let the accountant worry about that.
Online returns are 12th November iirc.