Confused about 20% cut off point under joint assessment

[Dinny]

My wife is about to give birth to our child and has left her employment in the middle of May. She will not receive maternity pay from the company and will not work again until next year.

We altered out tax status to joint assessment because of this. I recently received a letter from the revenue which I believe states that our cut of point for this year is 70,800.

I thought it would be 44,400 (married one income).

I am obviously very happy with this but would like to know if it is correct or has the revenue made a mistake ie. Does it mean for the 2008 tax year we can be in the 20% bracket for our joint 2008 income even though my wife will not work again until next year?

Thanks in advance.

 

[Iceman732]

Your wife did work in 2008! What Revenue have sent you out is correct. They may have neglected to mention that €26,400 of that cut-off point is non-transferable.

For example let say your wife earned €23,000 and you earned €40,000. (I'm not sure of the exact cut-off points) Anyway all your income would be at 20%. However say your wife earned €8.000 and you earned €60,000 then you would be liable to marginal rate tax. Your standard rate of tax would be €8,000 plus €44,000, the rest would be liable to 41%.