Best way to tax for a married couple?

kapisko1PL · 28-08-2020 6:20pm #1

Which is the best way for us to do our taxes? Would it be single, separate or joint?

We're on 39k and 28k gross per year and as I am completely green in this field I'd like to ask for some information as to what would be most beneficial for us. Got married in November 2019.

relax carry on · 28-08-2020 7:19pm

kapisko1PL wrote: »

Which is the best way for us to do our taxes? Would it be single, separate or joint?

We're on 39k and 28k gross per year and as I am completely green in this field I'd like to ask for some information as to what would be most beneficial for us. Got married in November 2019.

Jointly assessed. There's about 7k of unused rate band belonging to the person on 28k which can be transferred to the person on 39k. Saving of 800 euro per annum currently.

namenotavailablE · 28-08-2020 10:57pm

I've a free Excel spreadsheet which might help anyone with net pay type queries also- http://taxcalc.eu/monthlyss/Employee%20PAYE%20calculator.xlsm

kapisko1PL · 29-08-2020 12:36pm

Thank you guys much appreciated !!

kapisko1PL · 11-09-2020 9:00pm

Sorry to revive this post guys. I'm absolutely unfamiliar with the tax credits allocation and the rate band allocation.

If I get this right (and please do not refer me back to revenue.ie):

I'm on 39k wife is on 28k. Together we're on 67k.

If we do joint assessment it means that I get the 20% up to €44,500 which will save me 800 euro per year but my wife will be on 20% up to €26,300 and 40% for the remainder, so €1,700. This means she would have to pay more tax than she currently is but I would pay less so this would compensate?

So I would pay 800 less in tax, wife would pay 340 more in tax, long story short together wed save 460 per year, or 38.33 per month.

Is there a sense doing the joint assessment with our incomes?

namenotavailablE · 14-09-2020 9:36pm

You would take a cut-off point of €39000 (as that's all you need) and your wife would take €28000 (as that's all she needs). Each of you would pay tax at 20% on your earnings.

You might find the free spreadsheets at my website helpful-see http://taxcalc.eu/monthlyss/

relax carry on · 15-09-2020 10:57pm

kapisko1PL wrote: »

Sorry to revive this post guys. I'm absolutely unfamiliar with the tax credits allocation and the rate band allocation.

If I get this right (and please do not refer me back to revenue.ie):

I'm on 39k wife is on 28k. Together we're on 67k.

If we do joint assessment it means that I get the 20% up to €44,500 which will save me 800 euro per year but my wife will be on 20% up to €26,300 and 40% for the remainder, so €1,700. This means she would have to pay more tax than she currently is but I would pay less so this would compensate?

So I would pay 800 less in tax, wife would pay 340 more in tax, long story short together wed save 460 per year, or 38.33 per month.

Is there a sense doing the joint assessment with our incomes?

Sorry meant to come back to you.

Been a while since I've done it manually so stick with me.

Single individuals have standard rate bands of 35300 each. Under joint assessment up to 9000 euro of one spouses rate band can be moved to the other. There's no point doing this if both are earning over 35300. As your wife is on 28k she's not using 7300 euro of her rate band. You on the other hand are 3700 over yours. If you take 3700 of your spouses rate band then yours goes to 39000 and hers drops to 31600. All of her income is still taxed at 20% while you benefit from the extra rate band. The total saving to you is 3700 by 20% which is 740 euro. The total saving to your wife is zero as she still taxed exactly the same.

kapisko1PL · 16-09-2020 9:23am

relax carry on wrote: »

Sorry meant to come back to you.

Been a while since I've done it manually so stick with me.

Single individuals have standard rate bands of 35300 each. Under joint assessment up to 9000 euro of one spouses rate band can be moved to the other. There's no point doing this if both are earning over 35300. As your wife is on 28k she's not using 7300 euro of her rate band. You on the other hand are 3700 over yours. If you take 3700 of your spouses rate band then yours goes to 39000 and hers drops to 31600. All of her income is still taxed at 20% while you benefit from the extra rate band. The total saving to you is 3700 by 20% which is 740 euro. The total saving to your wife is zero as she still taxed exactly the same.

And this is exactly the answer I was looking for! I speculated that this might be the case but wanted someone to confirm from their own experience. Thank you very very much, I really appreciate it. ðŸ‘ðŸ‘

Best way to tax for a married couple?

Comments