Tax Calculation Thread

Mr. Incognito · 16-03-2014 10:10pm #1

Unfortunately a lot of posters are posting looking for personalised tax advice.

I.e Here is my salary, what should my tax be. My approach thus far has been to delete/ close/ lock these threads because Boards is not a registered tax advisor service. This has the effect of cluttering up the forum.

We cannot and do not stand over the veracity of any advice given from what are essentially anonymous posters, some are qualified tax professionals, some are tax students, some are essentially chancers who are giving incorrect advice.

As such I am creating this superthread. All threads along those lines will be dumped here and you can take your chances.

If posters want to advertise excel calculators here they can do so openly on the thread. Keep it out of other threads please though

Moved Posts

I have my one bed apt rented out and have a rental income of € 8880.00 and pay out € 9018.96 between mortgage, life assurance for the mortgage and a monthly maintance fee to a property company.
It has been rented since July 2012 firstly for 6 months at € 650.00 pm then from Feb 2013 to present at € 740.00 pm.
What income tax do I have to pay as I don't understand it, I did call the revenue in Dec 2012 who told me to wait until it was rented a full 12 months before doing anything we plan to sell in Feb 2015 so I just want to get everything straight.

Hey everyone,

I set up a company with a partner in 2012, we both own 50% of the LTD company. We are still trading but things did not really go ahead, no work put into the company so we have no profits, no losses, no expenses etc...

I was on Jobseekers Allowance for the full year 2013.

I have to file a Form 11 Income Tax for the year 2013... I didn't think I would have to pay tax on my Jobseekers Allowance...

Have I done something wrong or is this as it should be?

Thanks for the help

maneno · 16-03-2014 10:12pm

You dont pay tax on JA but you do on JB

Alan Shore · 16-03-2014 10:12pm

Tick the box for the PAYE credit and that will cover your liability.

user0022 · 16-03-2014 10:38pm

Thanks Alan, that worked!

I ticked "PAYE Credit"

and now my liability is Zero

Don't really know what ticking PAYE Credit does, can you explain it a bit? And it's ok to tick it? I had not income apart from Jobseekers Allowance in 2013...

Thanks so much

allthedoyles · 16-03-2014 11:41pm

Ticking the paye box does not solve the problem for you .

Paye tax credit is worth 8250e and your JA is 9776e , but even if both amounts were the same , ticking paye is not the answer.

JA is simply not taxable , so ignore it and do not declare it .

user0022 · 17-03-2014 7:31am

PAYE and the Personal tax credit covers it

Alan Shore · 17-03-2014 11:27am

As ATD said if its Jobseekers Allowance then it's exempt and goes in a different box on the form.

Same result but JA is not taxable.

user0022 · 17-03-2014 8:28pm

Yeah, that's what I was thinking...

I put it in this section (PAYE/BIK/Pensions)... I think that's where it's supposed to go.

Thanks for your help with this

Citizenpain · 17-03-2014 11:14pm

That section is for job seekers benefit ... Which is taxable

Job seekers allowance is not taxable . Leave it off the return

allthedoyles · 18-03-2014 1:10am

If you are unsure whether you claimed Allowances or Benefits in 2013 , then you could fill in the attached online form and a statement will be sent to you by post :

https://www.welfare.ie/en/Pages/secure/StatementOfJAJB.aspx

Citizenpain · 18-03-2014 1:00pm

first of all - your mortgage capital repayments are not an allowable deduction -
75% of your interest is allowable (if you ar prtb registered

more info here re what you can deduct
http://www.revenue.ie/en/tax/it/leaflets/it70.html

do seperate calculations for 2012 and 2013 to come up with taxable income for both years

Are you a paye employee? you might get away with filing a form 12

you will pay tax at 41% if you are on the high rate already
PLUS PRSI
PLUS USC

so potentially 52% of any rental profit you have will go in tax

TrishSimon · 18-03-2014 1:14pm

Citizenpain wrote: »

first of all - your mortgage capital repayments are not an allowable deduction -
75% of your interest is allowable (if you ar prtb registered

more info here re what you can deduct
http://www.revenue.ie/en/tax/it/leaflets/it70.html

do seperate calculations for 2012 and 2013 to come up with taxable income for both years

Are you a paye employee? you might get away with filing a form 12

you will pay tax at 41% if you are on the high rate already
PLUS PRSI
PLUS USC

so potentially 52% of any rental profit you have will go in tax

I am a PAYE employee on the lower rate as my salary is 31K so after the deductions I must pay 41% tax plus USC & PRSI ? maybe I am confused.

Citizenpain · 18-03-2014 1:36pm

ok - the lower rate band is €32,800 ( if you are single / or married and your spouse hasnt trransferred any of their band to you)

so in each year if you have a rental profit - the first 1800 ( 32800 - 31000 ) will be at 20% Tax - anything over will be at 41 %

PRSI is 4% of the profit each year
USC is 7% of the profit each year

TrishSimon · 18-03-2014 1:54pm

I am not making a profit, I pay out 9198.96 and take in 8880.00 rent.
My boss has given me a sheet he uses to work out his income tax to be paid so I am working on that.
I'm still confused by your reply above sorry I just dont seem to understand it.
I am deducting all my expenses from my rental incomes but not the actual mortgage payment and from what I can understand I then calculate it at 20% plus 11% for PRSI & USC.

Citizenpain · 18-03-2014 2:05pm

Sorry I meant Taxable Profit !

Tax 20% plus 11% for PRSI & USC. is correct as long as your Taxable profit is less than 1800

It would be easier to give you guidance if you put up your numbers separately for 2012 & 2013

Rental Income XXX
Minus
75 % of Mortage Interest (ONLY IF PRTB REGISTERED in 2012 & 2013)
Other expenses mgt fees etc

Mr. Incognito · 18-03-2014 2:22pm

I normally don't allow personalised calculations.

There are plenty of online calculators out there to help you work out your taxable income.

There are a few posters here with them in their sigs.

I don't stand by the veracity of them. If you have expenses in excess of your income you won't be paying any tax on it but I would guess those expense include the mortgage which you cannot deduct

In short- you have to do a rental computation

Rent Less Allowable Deductions- to see what is allowable read the guide to rental income in the stickies.

Mortgage NO. Life Assurance re Mortgage-= NO. Management company fees- Yes.

TrishSimon · 18-03-2014 2:43pm

Thanks I'm going to stick to the excel sheet my boss has sent me on it has all of the calculations in it, he owns a few places and said he always uses this format. I just have to adjust the tax amount from 41% to 20% as obviously he is on the higher rate.

Citizenpain · 18-03-2014 3:05pm

does it have Mortgage capital repaymensts and Life Assurance re Mortgage ?
if it does --- dont use it

PRTB reg fee is also deductable

TrishSimon · 18-03-2014 3:30pm

Citizenpain wrote: »

does it have Mortgage capital repaymensts and Life Assurance re Mortgage ?
if it does --- dont use it

PRTB reg fee is also deductable

No it basically has the rental income less deductions etc..so I will see where we end up after that but thanks for the advice.

TrishSimon · 19-03-2014 10:55am

Mr. Incognito wrote: »

I normally don't allow personalised calculations.

There are plenty of online calculators out there to help you work out your taxable income.

There are a few posters here with them in their sigs.

I don't stand by the veracity of them. If you have expenses in excess of your income you won't be paying any tax on it but I would guess those expense include the mortgage which you cannot deduct

In short- you have to do a rental computation

Rent Less Allowable Deductions- to see what is allowable read the guide to rental income in the stickies.

Mortgage NO. Life Assurance re Mortgage-= NO. Management company fees- Yes.

Thanks yes I have done that I was also told I can deduct the interest from the mortgage paid so am going to check that out also.

Citizenpain · 19-03-2014 11:13am

you can deduct 75 % of the interest paid - if you are prtb registered

http://www.revenue.ie/en/tax/it/leaflets/it70.html

TrishSimon · 19-03-2014 11:23am

Citizenpain wrote: »

you can deduct 75 % of the interest paid - if you are prtb registered

http://www.revenue.ie/en/tax/it/leaflets/it70.html

Yes thanks I am registered with the prtb but have forgotten my login details so will sort that all tonight, it has greatly reduced the amount I need to pay thanks !

Slipshaney · 24-03-2014 12:27pm

Firstly, Im not great when it comes to all things tax related. I received notification from my employer (via revenue) that my tax credits are being reduced by about half. I havent made any changes that I know of, the only thing I did recently was claim back on dental expenses for the year 2013. Can anyone help on this?

I am single, a PAYE worker and not claiming rent relief, tax credit for a dependent relative, home carers credit, etc

prettyrestless · 24-03-2014 1:25pm

Are you single/married?
Are you a PAYE worker?
Do you claim rent relief, tax credit for a dependent relative, home carers credit, etc?

Slipshaney · 24-03-2014 1:27pm

I am single, a PAYE worker and not claiming rent relief, tax credit for a dependent relative, home carers credit, etc

relax carry on · 24-03-2014 1:29pm

Slipshaney wrote: »

Firstly, Im not great when it comes to all things tax related. I received notification from my employer (via revenue) that my tax credits are being reduced by about half. I havent made any changes that I know of, the only thing I did recently was claim back on dental expenses for the year 2013. Can anyone help on this?

I am single, a PAYE worker and not claiming rent relief, tax credit for a dependent relative, home carers credit, etc

Did you receive a P21 balancing statement for 2013 stating that there was an underpayment which would be collected by reducing your credits?

Slipshaney · 24-03-2014 1:35pm

im not sure to be honest - I recall having to send on my P60 to them - would this be right?

How would an underpayment have happened - should my employer not have been looking after this?

relax carry on wrote: »

Did you receive a P21 balancing statement for 2013 stating that there was an underpayment which would be collected by reducing your credits?

relax carry on · 24-03-2014 3:43pm

Slipshaney wrote: »

im not sure to be honest - I recall having to send on my P60 to them - would this be right?

How would an underpayment have happened - should my employer not have been looking after this?

Underpayments can happen in many different ways, (multiple jobs, incorrect credits or rate band, taxable DSP payments etc). Normally all is order though.
You need to check your P21 for 2013. If you used the online system, then it may be in your request history. It may also have been sent to your postal address.
Quickest way to sort this is call Revenue.

Slipshaney · 24-03-2014 3:51pm

ok thanks for that - ive tried calling revenue already but it seems to be all automated - i cant get through to a human!

Murphj7 · 25-03-2014 12:12am

So my sister has bought a house in Wexford where she is from but rents and lives in Dublin. The mortgage will be 60 euro less than rent meaning profit.
When declaring the house is for rent what is taxed. The 60 euros or full value rent? Thanks

CIARAN_BOYLE · 25-03-2014 12:49am

Murphj7 wrote: »

So my sister has bought a house in Wexford where she is from but rents and lives in Dublin. The mortgage will be 60 euro less than rent meaning profit.
When declaring the house is for rent what is taxed. The 60 euros or full value rent? Thanks

75% of the rent is allowable for rent
Other expenses like repair and maintenance and prtb can be claimed against rental income.

Citizenpain · 25-03-2014 2:03am

You mean....75% of the mortgage INTEREST is allowed against the rent if prtb registered . The capital repayments are not allowed

http://www.revenue.ie/en/tax/it/leaflets/it70.html

Snake Plisken · 25-03-2014 10:40pm

Folks just looking for advice on how to submit these claims on via the PAYE Anytime online service, I have both Med 2 forms filled out which I don't have to send in, the root canal cost me 770 with an Endodontist, a few months later I had a crown fitted which cost 850.

So I click on the 2013 tab and click the Health Expenses tab and click on the non-routine dental expenses, now do I put in the total amount for the two med 2 forms which is 1620 or do I need to put it in as two separate claims?

Thanks

Citizenpain · 26-03-2014 2:26am

Total is fine as long as they are in the same calendar year . Keep the med2s in case of audit

ABCCBA · 27-03-2014 11:54am

Hi everyone, Could anyone give me some advises to complete this question?
thank you!

Tom Jones, aged 60, has been running his business for many years. He has decided to take early retirement. His daughter, Sonya, has been working in the business for the last 5 years. Tom would like to transfer the business to Sonya.

Alternatively, a local businessman has made an offer to buy the business for 850,000.

REQUIRED:
(a) Advise Tom of any capital gains tax liability that he might have
(i) on the transfer of the business to his daughter
(ii) on the sale of the business to the local businessman.
(b) Recommend which course of action he should take in order to minimise his tax liabilities.

Note: Marks will be awarded for numerical examples used to support your advice

morningperson · 27-03-2014 1:49pm

I am a PAYE worker and I started maternity leave a few weeks ago. I am receiving maternity benefit payments of 230 euro per week, paid directly into my bank account. My employer let me know they will deduct 920 a month from my salary (or 230 a week for 26 weeks).
I am wondering if this is correct, or if an element of the 230 is related to the tax on materity benefit and will be automatically be deducted via tax credit changes.
So if my employer deducts the full 230 per week am I paying the taxed part of my maternity benefit twice?

seamus · 27-03-2014 1:53pm

No, your employer is making sure you don't pay extra tax.

Example 1 here is exactly what they're doing:
http://www.citizensinformation.ie/en/reference/case_studies/case_study_taxation_of_maternity_benefit.html

Verdure · 27-03-2014 2:02pm

Suppose one returns to Ireland after an absence of six months or more, with enough money to buy a suburban house. What taxes would that lump sum be subject to?

Mr. Incognito · 27-03-2014 3:53pm

Sorry.

Do your own homework.

I'll dump it in the calculation thread and someone who has time might decided to give you a hand

morningperson · 27-03-2014 10:08pm

Maternity benefit taxation query
___________________________

I'm drawing a blank attempting to put it all together. But say for example:

I receive 920 euro maternity benefit per month paid directly to me.
My employer deducts 920 from my gross monthly salary.
Revenue reduce my Standard rate cutoff point to recoup the tax on maternity benefit 920 from my salary. This is because the 920 was deducted from my gross salary so I haven't already paid tax on it.

Is this what should happen?

However...since my original post I have now been paid and my employer doesn't seem to have deducted the 920 euro as we agreed they would.
Do I need to ensure that the deduction of maternity benefit from my salary takes place in the same months that Revenue have reduced the standard rate cutoff point. Otherwise I think I would end up paying more tax than I should if the months are mismatched?

allthedoyles · 28-03-2014 11:02pm

morningperson wrote: »

Maternity benefit taxation query
___________________________

I'm drawing a blank attempting to put it all together. But say for example:

I receive 920 euro maternity benefit per month paid directly to me.
My employer deducts 920 from my gross monthly salary.
Revenue reduce my Standard rate cutoff point to recoup the tax on maternity benefit 920 from my salary. This is because the 920 was deducted from my gross salary so I haven't already paid tax on it.

Is this what should happen?

However...since my original post I have now been paid and my employer doesn't seem to have deducted the 920 euro as we agreed they would.
Do I need to ensure that the deduction of maternity benefit from my salary takes place in the same months that Revenue have reduced the standard rate cutoff point. Otherwise I think I would end up paying more tax than I should if the months are mismatched?

Your first paragraph is wrong or would have been wrong if your employer had to do this .

But your employer was correct including the Maternity Benefit in your gross pay.

Revenue don't need to mess with your tax credits / SRCOP , and you will now pay the correct amount of tax on MB

When you receive P60 , you will now have two income figures :

Gross income including taxable benefit
Total amount of taxable benefit included in above figure

milhous · 24-04-2014 10:28am

My wife will be going on mat leave in July, I'm not working so she has my tax credits. As per her contract she is not entitled to any mat leave from work, so it will just be the €230 a week from the government. As I understand that €230 is taxable. Does this mean we would have to wait until the end of the year to claim any tax back?

Also as we are trying to figure out how much we have to keep us going until Jan. If I went to a tax calc, and got the tax for gross salary for the year, then did the same with the 7 months she's actually worked and take one away from the other? Would that give an indication of how much we'd be owed or is that completely wrong?

Thanks in advance

2rkehij30qtza5 · 12-06-2014 10:24am

Hi, I know there are a few threads on bonuses here but it still doesn't make sense to me. Can someone please explain.

If you earn say, €50,000 per year and then you get a bonus of say €10,000 once a year...do you pay the higher rate of tax on this bonus because you pay the higher rate of tax on your salary?

I have read some threads here that say you only get 40% of the bonus into your head. So, if someone is on the higher rate of tax, gets a €10k bonus...that means they get €4k into their hand and €6k goes to the taxman? I know you can put it into pensions and all that but if you didn't you are basically taxed 60% of your bonus??

Ardeehey · 12-06-2014 10:31am

yup, at those numbers you pay the higher rate of Income tax plus PRSI plus USC...prob works out about 49% tax or something like that

AlexisM · 12-06-2014 12:04pm

The total marginal tax rate is 52% (unless you're self-employed when it's 55%) - so you'll pay 52% on your 10K - and receive 48% (€4,800).

UNLESS, your employer takes the view that 10K is an all-in bonus amount that they are willing to pay, including employers PRSI - which would mean they will net off the 10.75% employers PRSI. That would make your effective overall taxrate 56.7% leaving you with 43.3% (€4,334).

hmmm · 12-06-2014 12:25pm

Reuben Melted Slab wrote: »

but if you didn't you are basically taxed 60% of your bonus??

Welcome to the world of "de rich" according to certain political parties.

Bonuses are simply income and are taxed as such.

CIARAN_BOYLE · 12-06-2014 3:27pm

Reuben Melted Slab wrote: »

Hi, I know there are a few threads on bonuses here but it still doesn't make sense to me. Can someone please explain.

If you earn say, €50,000 per year and then you get a bonus of say €10,000 once a year...do you pay the higher rate of tax on this bonus because you pay the higher rate of tax on your salary?

I have read some threads here that say you only get 40% of the bonus into your head. So, if someone is on the higher rate of tax, gets a €10k bonus...that means they get €4k into their hand and €6k goes to the taxman? I know you can put it into pensions and all that but if you didn't you are basically taxed 60% of your bonus??

41% tax 7% USC and 4% PRSI

So 52% total tax

It sucks but thats the way things work once you are on the higher rate.

Someone I know recently asked for a few days extra holidays rather than a pay rise because the tax on the extra pay would be so high.

stuba · 13-06-2014 10:07pm

I submitted my Med 1 form for 2013 a couple of months ago, and received a payment of little over 20 Euro in my bank account today. I payed over 1000 Euro in medical expenses in 2013 and was expecting around 20% of this as relief. Does this sound right and did I misinterperate the relief?

relax carry on · 13-06-2014 11:13pm

stuba wrote: »

I submitted my Med 1 form for 2013 a couple of months ago, and received a payment of little over 20 Euro in my bank account today. I payed over 1000 Euro in medical expenses in 2013 and was expecting around 20% of this as relief. Does this sound right and did I misinterperate the relief?

The relief is granted at the standard rate (20%) Since it's a tax relief, it's dependant on how much tax you paid in the claim year. If you paid more than 20 euro Paye for the claim year, contact Revenue to see why more was not refunded if you cannot see the answer on your P21.

CIARAN_BOYLE · 17-06-2014 10:33am

stuba wrote: »

I submitted my Med 1 form for 2013 a couple of months ago, and received a payment of little over 20 Euro in my bank account today. I payed over 1000 Euro in medical expenses in 2013 and was expecting around 20% of this as relief. Does this sound right and did I misinterperate the relief?

You should have gotten upto 20% of the amount spent assuming that you paid enough taxes. However when you request refund they do a full P21 so perhaps you underpaid tax at somepoint during the year.

ED E · 17-06-2014 12:05pm

Hi all,

Slight discrepancy between my P21 and P60 I'd like to clear up.

P60 for year end 31st Dec 2013:
Tax Credit 3010
P21 for year end 31st Dec 2013:
1,650.00 Personal Tax Cr
372.80 PAYE Tax Credit

As Im a full time student my income is low enough, so are they only applying the necessary proportion of the credits I have for the year, or is the P60 incorrect?

Filling in the Form12 now and it'd just be handy to know for this time next year as my income will hopefully be a bit higher.

Thanks,
ED-E

Tax Calculation Thread

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