Just Married?  Congrats! 

This week in the Wednesday club we spoke about how you may have potential wedding pressies from the taxman!
If your taxes are not updated you could be missing out on vital tax credits that could make a big difference to your take home pay.  For example:

• If you are married you are entitled to the married tax credit which also increases  your tax band.
• Increase in Rent tax credit  if married.
• Home Carer’s  Tax Credit – if one spouse is at home and cares for one or more dependent children.
• Amongst other changes – our full tax assessment will cover these

How it works?

In the year of marriage both spouses continue to be tax as two single persons but if the tax you paid as single people is greater at the end of the tax year than if tax as a married couple then a refund of the differences can be claimed.

How you can be taxed in the following years?
The following options are available:

• Joint assessment
• Separate Assessment
• Assessment as a Single Person (Separate Treatment)

Joint assessment is the most favourable method of assessment for a married couple and it automatically given by Revenue once they are informed that you are married.  You can at any time elect for any of the other two options. 

WARNING! 

We strongly suggest that you do not choose “Separate Treatment” without getting professional advice.  Once this is chosen, you cannot backdate changes and we have seen where clients missed out on substantial refunds because of this.

It is advisable to be aware of the options that are available to you and how it best suit you tax situation.  You can contact us on 059 9136031 with any questions on the above and we can check your taxes for the last 4 years to make sure you having been missing out on refunds.

Examples

In the following two examples we will use the same figures.  Mary and john and married and the example below will show how being set up correctly as married will affect the tax you will pay. Mary earned €48,000 in 2009 and Tony earned €25,000

Assessment as a Single Person (Separate Treatment)
Mary
Income 48,000

Standard rate band 36,400 x 20% = 7,280
      11,600 x 41% = 4,756
              12,036
Tax Credits
Personal Tax Credit  1,830
PAYE Tax Credit      1,830
        3,660 
         
12,036 – 3,660 = 8,376

John
Income 25,000

Standard rate band 25,000 x 20% = 5,000
          
Tax Credits
Personal Tax Credit   1,830
PAYE Tax Credit       1,830
        3,660 
         
5,000 – 3,660 = 1,340

Total Tax Payable (8,376 + 1,340) = 9,716

Joint Assessment
Mary’s Income 48,000 + John’s Income 25,000 = 73,000

Standard Rate Band
Mary     45,400 x 20% = 9,080
2,600 x 41% = 1,066
John     25,000 x 20% = 5,000
15,146

Tax Credits
Married Tax Credit     3,660
PAYE Tax Credit x 2    3,660
7,320

Tax Payable 15,146 – 7,320 = 7,826

 And Finally, don’t forget that if you are due a child, then your tax situation changes again while on Maternity Leave and receiving Maternity Benefit.  In my own case, I’m a year and a half married and expecting in a few months, so acutely aware of the differences all these can make!

If you have any questions, you can contact me or any of the team on 05991 733 00

best wishes,

Yvonne