Recently Married - What Assessment?

[OnLooker]

I am recently married and have started looking into the different taxation options open to himself and my wife. I'm not fully sure on the options as the examples aren't very good.

I earn €52k a year while my wife earns €32k

Do your credits increase when you marry? What is the best way to be taxed as I think we need to inform the tax office when we inform them of our marraige. I realise we will be jointly assessed in this current year but the assessment changes will kick in next year.

It would be obviously great if I could pay less tax in the top band as my wife is earning a good bit less than me.

 

[DB74]

In general, everybody can earn €36,400 at the 20% band with the balance at the 41% rate

One spouse can transfer a maximum of €9,000 of their 20% band to the other spouse.

In your case, where your wife earns €32K, she has unused 20% band of €4,400 (€36,400 minus €32,000)

Because you pay tax at the 41% rate, you should transfer the balance of your wife's 20% band (ie the unused €4,400) to yourself.

The effect of this is that €4,400 of your salary will now be taxed at the 20% rate instead of the 41% rate.

Net saving to you of €924 per annum (€4,400 x saving of 21%) or €77 per month

IMO if you can manage without this €77 per month, I would leave things as they are and send in a tax return each year (with medical expenses, bin charges, etc) around this time and you should get a nice cheque back from Revenue for approx €1,000 which is always handy at Christmas

Each to their own though.

 

[Waves]

Married tax

Hello
I hope you don't mind me piggy backing on this thread, but it is very similar to my own query.

My husband's employer recently annouced redundancies. He is not affected, but I am trying to work out how much worse we would be if he was (taking tax as well as childcare costs into account).

My understanding is that the 1830 tax credit is transferable. The only other extra tax relief I can find is the 9000k allowed at the 20% rate instead of the 41% rate (as noted above). The increased band at 20% instead of 41% works out at a difference of €1890 which would bring the total increase in my pay to €3720 per year. Is that the maximum extra that I would receive in my pay if there were only one of us working?