Case III income on tax return - quick help.

M

MondayMorn

Guest
I need you assistance.
I am completing my tax return for YE 2008 today (AHH). We are married couple. However one spouse has only CASE III Income (which is subject to DIRT). I am using round sums below just to get my query accross.

Limit for standard rate tax for 2008 is the lower of :
(a) Eur44,400 + spouse II's income
or
(b) Eur 70,800

Correct?

Our situation:
Spouse 1:
Income from Profession/ Trade : 44,400
Case III income (gross amount): 5,000

Spouse II:
Case III income (gross amount): 5,000

Total income for Married couple 54,400

Standard rate cut off will be = (49,400)* = Taxed at 20%

Balance (54,400 - 49,400) is 5,000 = Taxed at 41%
Less any DIRT (x) = taxable pay.

My question:
This above does not seem right, as I am now taxing my Spouses' Case III income (which has already been taxed) at 41% and I am only recieveing a DIRT credit for half that?? Should i include CaseIII income for both of us in the return at all - if it has already been taxed??

Any help greatly appreciated.
 
Please ignore my other post. I had pressed post before i was finished editing my post. This is the correct post.
 
Your total joint SRCOP is increased by the value of the DIRT deducted income. So that it is only taxed at 20%. You then get credit for the DIRT paid which leaves Nil Tax. Of course there may be PRSI / Levies implications on the Case III income which is a separate matter.

Your SRCOP becomes 44,400+5000+5000= 54,400
Gross Tax would be 10,880
Less Tax Credits

You'd be liable to PRSI / Levies on the 5,000
Your spouse would be liable to min PRSI of 253

( do it on ROS offline to see )
 
You must log in or register to reply here.
Back
Top