Tax Calculation Thread

Deleted User wrote: »

Sorry if this is the wrong place to ask this.

I was working as a contractor until the end of January of this year and on the first of February started working as a permanent employee. I just noticed on my payslip that I seem to be paying more tax than i should be.

I entered my figures into virtualaccountant.ie and I seem to be paying about 1200 euros more tax than I should be. Can anyone advise on how I rectify this?

Wanna show us your payslip (personal details hlocked out so we can see what the actual problem is. Otherwise the generic answer is to fix it on revenue's myaccount service.

[Deleted User] wrote: »

Sure.

PRSI Class A
PRSI sub class 1
Std rate cut off 0
Tax credit 0.
Gross payment:6251.66
Total deductions: 3309.21
Net payment: 2942.37

Net tax: 2541
PRSI: 254.56
USC: 509.12

Last 3 months numbers are all about the same.

Now that ive typed all that out it looks like its not taking account of my cut off rate or personal tax credit.

You have zero credits and rate band applied to your new job. Did you register your new employment with revenue?

https://www.revenue.ie/en/online-services/services/paye-services/add-a-job-or-a-pension.aspx

[Deleted User] wrote: »

I logged into revenue.ie and my new job is there but my old one is there too. How do I remove it and get my tax credits applied?

Instructions should be in the below link about moving credits and rate band. You may have to contact Revenue to get the old job ceased.

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-38/38-06-04.pdf

Those figures look correct assuming that you have a full medical card.

Here's what my spreadsheet shows:

Wondering if anyone can advise. I recently got married and was advised to inform the revenue. I thought it was a simple "tick the box" but saw there are different methods of assessment. I currently earn approx €42,000 per year and my wife earns somewhere in the ball park of 15-20,000. Am I right in saying that joint assessment is the way to go and I take all the tax credits?

@ p to the e: Yes- the option to go for is 'joint assessment'. It's pretty much up to yourselves how the credits and standard rate band are split (although your wife can't transfer the 'Employee credit' [assuming that she's an employee]).
I'd suggest each of you taking the amount of your income as standard rate band.

@ helimachoptor: You're taxed on rental income - allowable expenses. The full mortgage isn't deductible from rent- just the interest component (as you're renting to a Local Authority, you might qualify for 100% of the interest being deducted. Normally, it's 85%).
There are more details available here: [LINK]

I've a free spreadsheet for helping with suggested SRCOP splits downloadable at http://taxcalc.eu/monthlyss - it's the 'Allocating SRCOP between spouses' one on that page.

Based on earnings of €44000 and €29000, I'd allocate a total of €40100 to the higher earner and €29000 to the lower earner. This maximises immediate cashflows so you don't have to wait until Jan 2019 to recover any unused SRCOP.

* PRSI and USC are both charged on gross earnings minus any 'salary sacrifice' deductions (e.g. bike to work or travel saver tickets). PRSI is generally 4% for most employees. USC is at various rates on various bands of income.

* PAYE on gross earnings minus any 'salary sacrifice' deductions and any pension or income protection (PHI) deductions.

You would wait till next year and file a form 12 for 2018. There are two ways you can declare the income you could declare it as a trade if there were expenses related to it you would do it this way and pay the tax on the profit or if there were no expenses related to it then you would enter it in fees, commissions etc.

Entering it as a trade on a form 12 the profit would need to be 5,000 or less if greater will need to register as a tax assessable person and file a form 11.

My job is meant to have a flat rate expense of 520 or so...

I was only credited with 113 or something like that.

Is this a very basic mistake or something I can fix with a phone call I wonder

Hello ,
I am a single man 35 currently working in two jobs ,first job in retail with annual income around 18000 euro paid montlhy and second job as a firefighter with estimated income 18000 -20000 euro paid quarterly.Both jobs will give me very similar income .Because I started work as firefighter in middle 2019 I have been taxed very hard . I want setup my tax credit and rate band on revenue site for 2020 so I kindly ask here for advice .Thanks Lukasz

DesperateDan wrote: »

Lads, I have some real dumb questions here. I don't understand this myAccount business at all. Sorry but I don't understand why it's so full of detail yet absolutely nothing is explained.

Wtf is a statement of liability vs an income tax return? Why is there no income tax return for 2019? Why can I "request" a statement of liability for 2018 but only "edit" it for 2019? If I choose 2018 > Edit Income Tax Return > Tax Credits and Reliefs I have 3 check boxes to "confirm". What actually happens when I confirm these, and why would I even need to do it?

This explains a lot of what you asked
https://www.revenue.ie/en/jobs-and-pensions/end-of-year-process/statement-of-liability.aspx

2019 is different to other years as it is the first year under PAYE modernisation.

Up to 2018 you could request a statement of liability (p21 in old terminology) in 2 ways. Either (A) request one and revenue would issue it based on what documentation they had for you or (B) complete tax return with any additional items you felt were relevant which revenue mightn’t know about unless you told them, e.g. medical exp.

For 2019 the only way to get the sol is to complete a tax return. Your preliminary result for the year might show a refund but if you want it you have to complete a return. That way you are declaring the income and claims to be a complete and true reflection of the year.

You need to confirm the items you showed so revenue know that you agree that you’re entitled to them. If anything is there that shouldn’t be have the option to edit or remove it ( some things can’t be removed as they are statutory items such as your personal credit ).

Once the return s submitted the sol will issue and any under or overpayment will be recorded.

DesperateDan wrote: »

Ok thank you very much for that, so by clicking confirm and completing the 2018 tax return it tells the revenue that all of these things need to be accounted for, and they will just calculate themselves if I need a refund basically? For example I would have thought I was due €200 for the over €1000 medical insurance I paid in 2018 because apparently that is refunded @ 20% (fingers crossed!).

I also have a crazy situation right now where I thought I was due at least €700 but they are telling me I've been over-taxed throughout the year because I under paid tax during a previous year which I have no idea how that happened as a regular PAYE employee so have to go and dig through all previous years as well.

Unless the medical insurance credit was just added by you; then you've already received the benefit of it through the year so no further refund could be due based on that relief. Also you may need a refund but unless you are claiming and additional tax credit/relief; have been over taxed due to switching multiple jobs through the year or were emergency taxed; then normally no refund/underpayment should occur as you would have been taxed correctly through the year by your employer.

Based on the data you provided, here's my spreadsheet's calculations (month 1 is with overtime, month 2 is without):



You can get the simple average for each month by dividing the net pay values by the number of hours worked in the month.

The total deductions from your overtime depend on whether your earnings are over the €35300 standard-rate band- once you're under that, the typical deductions will be 20% PAYE + 4% PRSI + 4.5% USC. However, once you're over the €35,300, the PAYE rate goes to 40% on the excess, PRSI stays at 4% and the USC rate stays at 4.5% (unless you earn over €70K)

Hi,

I am married and have one child (2 years old now). My wife and I are on Joint Assessment.
I've been trying to work out if we'll get anything back for 2019. I submitted the return on Jan 1st but still waiting for my SOL. It's been such a long wait, so, I want to now try and calculate it myself to see if we're owed anything back. Due to our situation in 2019, I'm not finding it to be straightforward, so would appreciate any guidance on how to do this.

Me -
I was employed until the end of August 2019, when I was made redundant. My wife was unemployed when I was working, so I had the following.
€44,300 SRCOP
€3,300 Personal tax credit
€1,500 Home carer's tax credit
€1,650 Employee Tax Credit

Due to the redundancy, I received a lump sum payment that was made up of the tax-free statutory redundancy payment and an ex-gratia payment which was also tax-free as it was well within the exemption amount.

I was on Jobseeker's Benefit from September to December. I claimed Unemployment repayment in December and got a refund due until 5th December.


My wife -
She was unemployed most of 2019 but started working in August, just 2 weeks before I finished up. When unemployed, she was not on any pay-related benefit (ineligible).

I didn't transfer the unused rate band and credits to her since it seemed simpler to sort it out at the start of 2020 via a Tax Return. So, in 2019, she had the following.
€0 SRCOP
€1,650 Employee Tax Credit


--
All previous years, I was the only one employed, so I could simply use an online calculator with the status "Married, 1 income". But in 2019, when one of us was employed, the other was not (apart from the 2-week overlap as stated above). So I'm not sure how to even begin the calculation, never mind factoring in other details like the Unemployment refund I have already received. Any pointers would be appreciated.

irishfemme wrote: »

I am trying to understand my tax ...

My tax credit is a total of €4950, it was reduced by 20% of an illness benefit received. Ie tax credit is now €4000
At the end of the tax year, claiming my statement of liability, my illness benefit is added to my total income & taxed again at 20%.
The question is, I noticed my tax credit is still reduced on my statement ��? So, am paying in form of tax credit reduction & also in tax, against the same tax credit. Does this sound right? Or is the tax credit reduced by something else unspecified?
Let assume my total income, including illness benefit is €20,000, taxed at 20% , that's €4000, I should have the €4950 tax credit, but instead it says, tax credit €4000, tax calculation €4000, no overpayment.
Shouldn't revenue owe me the €950 unused tax credit?

If your Tax credits are €4,950 and your taxable income is €20,000 which needs €4,000 in tax credits to cover it ( at 20% ) then you have no tax to pay. The extra €950 isn't due to you. It's not tax you've actually paid.

Think of it this way using smaller earnings. A student with a part-time job earns €5,000 pa. The tax due on that would be €1,000. Normal tax credits single person are €3,300 so that covers any tax due. They don't get the other €2,300 refunded to them. However if they earned up to €16,500 the tax due would be €3,300 and the tax credit covers up to that so no tax due.


You could, with tax credits of €4,950 potentially earn up to €24,750 before you'd have tax kicking in.