(Married Tax) My wife wants to work for just 1 month. Will we lose anything?

B

BookOfJ

Guest
We're married with no children. Normally, we're taxed as a single income family because my wife is unemployed. I earn 47k per year. (Rate band 1 €45400)

Now, my wife's friend offers her a temporary job for just 1-2 months, €350/week paid every 2 weeks.

From what I've read, the things that will happen are:
- my wife will now be entitled for €1830 PAYE Tax credit. This means if she works for 1 month in a year, she will not pay any tax? If she works 2 months, she'll pay just 20% of what exceeds €1830?
- I have €3660 Personal, €1830 PAYE and €800 rent tax credits. Will any of these change if my wife work too?
- When she will be unemployed again, do we have to notify Tax Office?

Thank you very much!
Please tell me if I miss something.
 
Your wife can earn up to (€1,830/20%) €9,150 without incurring any tax liability.

She may be taxed under emergency basis but this can be reclaimed from Revenue when she gets her P45

There will be no liability to PRSI or health contribution if wage is less than €352 per week.
 
Although you use the term "unemployed " for your wife, you have not said that she is receiving any Social Welfare benefit. My reply below assumes she is merely "not working".

The least disruptive way to go about it, with no change to your tax credits, would be for your wife to apply for just the Paye credit on a Form 12A. This allows her to earn just under €176 tax-free per week (€1830 x 5 tax-free per year) , so she would pay 20% tax on the balance if she is put on a Week 1 Month 1 system. If so, she can reclaim the tax later.
On a cumulative basis she would not be paying any tax, as her Paye credits to date in 2010 would cover her income.
She should not be paying income levy, as she is unable to earn over €15,028 before the year end. Employees earning under €352 per week are exempt from health levy and Prsi.
When your wife ceases employment she will get a P45 which she sends to Revenue to notify them of the change.
 
Your wife should complete & file [broken link removed] to avoid having to pay emergency tax
 
Thank you very much!

Yes Gervan, my wife is "not working" and not receiving any Social Welfare benefit.

However, I'm a bit confuse. This means, on Form 12a, to apply for just Paye credit, she should tick the box for Single Person Tax credit instead of Married Persons Tax credit ??? and she shouldn't give details of Spouse's income????
 
I would say she should tick neither the Single Person Tax credit, nor the Married Person's tax credit. You are already claiming this.
 
BookOfJ said:
Thank you very much!

Yes Gervan, my wife is "not working" and not receiving any Social Welfare benefit.

However, I'm a bit confuse. This means, on Form 12a, to apply for just Paye credit, she should tick the box for Single Person Tax credit instead of Married Persons Tax credit ??? and she shouldn't give details of Spouse's income????
Click to expand...

Its no wonder you are confused - So many boxes to tick and not one box for PAYE Tax Credit.

Fill in the form , bearing in mind that you are applying for a paye tax credit in respect of your wife only .

Therefore , do not give spouse details or this will confuse tax office and they may send you both new tax credit certificates which would be incorrect .

Draw a line through spouses details and write N/A .

Attach a short note explaining that you wish to apply for a paye tax credit only .- Tell them your wifes occupation and she may get small credit for working expenses as well .

Use your wife's PPS Number on all correspondence .-
 
allthedoyles said:
Therefore , do not give spouse details or this will confuse tax office and they may send you both new tax credit certificates which would be incorrect .

Draw a line through spouses details and write N/A .

Attach a short note explaining that you wish to apply for a paye tax credit only .- Tell them your wifes occupation and she may get small credit for working expenses as well .

Use your wife's PPS Number on all correspondence .-
Click to expand...


No no no no

Doing this will get your wife set up as a single person and she will then get too many credits and you will (as a couple) have a massive underpayment which will eventually come to light (search for another recent thread on this topic where the poster eventually got a bill for 15,000)

Fill in spouse details as requested to do so - this will enable the tax office to ensure that you are set up properly as a married couple. They require spouse pay details because if you were not using all of your credits and rateband they would transfer the excess to her (not applicable here, but they don't know that unless you tell them).

The PAYE credit will be automatically granted - that is why the 12A asks whether tp is related to employer (it is not allowed if working for e.g. spouse).

Do not leave spouse section blank - it's just storing up trouble for the future.

Sybil
 
Another thing to be aware of- your spouse will have the income levy deducted from her pay but after December she will be able to reclaim this as her total income for the period of employment and the year will be under €15028.

See pghs 2.27 and 2.23 of [broken link removed]
 
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