€18000 tax limit

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roker

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I posted this question yesterday but cannot find it.

Because of the pension increases and extra payments, I am now over the €36000 tax threshold for myself and my wife and paying tax for the first time in 15yrs.
Has this limit been increased in the buget?
 
Hi roker,

I have checked your account and you didn't post it yesterday but did post it twice today, I have deleted today's duplicated post :)

S.E.
 
roker said:
I posted this question yesterday but cannot find it.

Because of the pension increases and extra payments, I am now over the €36000 tax threshold for myself and my wife and paying tax for the first time in 15yrs.
Has this limit been increased in the buget?
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It hasn't been increased since 2008. The last time it was changed, in 2011, it was cut from €40,000 to €36,000.
 
If you and your wife each have pensions of at least 8875 euro you will both get maximum PAYE tax credit of 1775 euro. You would also each get a personal tax credit of 1775 euro. You will also have age tax credits of 245 euro each.
Your total tax credits for 2023 are 7590 euro. This allows you to earn 37950 euro before you become liable for income tax.
Your total tax credits for 2024 will be 7990 euro. This will allow you to earn 39950 euro before you become liable for income tax.
 
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If I may use this thread to ask another question that I have about exemption limits:

People over 65 are exempt from income tax if their "total income" is below the exemption limit. The phrase "total income" sounds fairly clearly like it means everything, but, just to be sure, are there any exceptions? For example, it is possible to claim income tax relief on long-term leased farmland. Is that income still included when calculating "total income"? What about income from forestry, which is also tax free (and Teagasc says "Woodland grants are not treated as income but in the preparation of annual accounts by an owner the cost of planting and maintenance should be shown as net of grants received")?
 
basilbrush said:
If I may use this thread to ask another question that I have about exemption limits:

People over 65 are exempt from income tax if their "total income" is below the exemption limit. The phrase "total income" sounds fairly clearly like it means everything, but, just to be sure, are there any exceptions? For example, it is possible to claim income tax relief on long-term leased farmland. Is that income still included when calculating "total income"? What about income from forestry, which is also tax free (and Teagasc says "Woodland grants are not treated as income but in the preparation of annual accounts by an owner the cost of planting and maintenance should be shown as net of grants received")?
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The 18000 euro exemption for over 65's is basically worthless.

In 2024, any single person with earned income of at least 9375 euro and any other income up to a combined total 18750 euro will be below the level of income needed to pay income tax.
 
S class said:
The 18000 euro exemption for over 65's is basically worthless.
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But many people over 65 do not have earned income. If they earn the €18k from deposit interest or other sources that do not qualify for the earned income credit, then it seems as if the exemption is quite valuable.
 
basilbrush said:
But many people over 65 do not have earned income. If they earn the €18k from deposit interest or other sources that do not qualify for the earned income credit, then it seems as if the exemption is quite valuable.
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The term earned income was not a good one.

I should have said PAYE or self employment income.
Most people over 65 would have PAYE income from a pension.
If they have enough of this income they will be able to make use of the PAYE /earned income tax credit + the personal tax credit. With both tax credits they can earn more than 18000 euro before entering the tax net regardless of what age they are.

The 18000 euro exemption would only be an advantage to an over 65 year old with little or no PAYE / self employment income and a considerable amount of investment / rental income. e.g. not able to claim full PAYE / self employment tax credit.
 
S class said:
The term earned income was not a good one.

I should have said PAYE or self employment income.
Most people over 65 would have PAYE income from a pension.
If they have enough of this income they will be able to make use of the PAYE /earned income tax credit + the personal tax credit. With both tax credits they can earn more than 18000 euro before entering the tax net regardless of what age they are.

The 18000 euro exemption would only be an advantage to an over 65 year old with little or no PAYE / self employment income and a considerable amount of investment / rental income. e.g. not able to claim full PAYE / self employment tax credit.
Click to expand...
Is pension income always treated as earned income?
 
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