Rental income - really stuck!

M

Maurao

Guest
Hi there,

Hope someone can help. I have been renting my apartment for circa 4 years...tax paid each year. Up to now, tax has been calculated by an accountant, couldnt afford it this year - so hence, its down to me.

Bit of history - circa 2 years ago, revenue contacted me for my preliminary tax payt, which was circa December time - this was about 287e. Same the following year - about 132.
My tax bill this year to revenue, in the October deadline, was always around 1,200 - 1,400.

TBH this is the first year I have looked at the accounts myself. On this preliminary tax - do I need to do anything this year on that? Last year my tax bill was 1024, paid in Oct 2011, and then 132, when revenue contacted me a few months later.

This year - for 2011 rental income, I calculate my tax to be 1262. Do I need to pay any preliminary tax on that?? Or where have revenue / accountant come up with the figures...I see no reference to preliminary tax on previous tax returns.

Also - I am a PRSI worker - does that mean I have to add 7% USC and 4 % PRSI onto the gross taxable income?? Surely not if I already pay this at work!!

Thanks all for your help! My accountant btw is gone- hence helped my decision to do this myself!

Maura o
 
Your prelim tax for 2012 should be paid by the end of this month (you get a couple of weeks extra if you use ROS online to pay). At the moment, you are not charged USC on the income, but watch out for the December budget. I think you should pay slightly more than you think you owe based on the previous 4 years tax on the rental income - if you're a PAYE tax payer in general, then they're should not be too many surprises with regards to your prelim tax. Make sure you claim for depreciation on contents and any major costs for maintenance.
 
Thanks alot Eithneangela....so, do you think my 1262 should be increased? Based on me not paying enough previously? what would I base this increase on?calculation wise....
I'm saving for an accountant for next year now :)
 
Why do you need an accountant? The form (12, I think) is really straightforward, specially as your main income is from PAYE. I'd go for €1,500, just in case something crawls out of the woodwork that you're not aware of, specially if you had an accountant working out the details until now. Can you ask your accountant for a copy of the previous forms he submitted on your behalf? If you can get this, then you have a very good guide to submitting the current tax obligation and filling out the detail form next year. In fact, I'm sure you're entitled to have a copy of same.
 
Thanks Eithneangela - I pay PRSI currently, not PAYE - does that complicate things? Form 11 one for me I think...many thanks for your help on this - I do appreciate it
 
It may not be so straightforward as I had originally thought - I had assumed you were PAYE. So, if you're not paying tax on income regularly, and you have earned income, this has to be reported for tax purposes just as your rental income does. Maybe this is why you had need for an accountant, and I'm afraid I can't advise you any more about the rental income as my advice was based on the wrong supposition. I hope it works out for you.
 
Mauro, revenue can be very helpful. When you've done the figures you might call into them and ask them to see if it's correct. Also if you have a doubt, write that in your submission to them.
 
Bronte said:
Mauro, revenue can be very helpful. When you've done the figures you might call into them and ask them to see if it's correct. Also if you have a doubt, write that in your submission to them.
Click to expand...

With only a week to go before the deadline, the timeframe is probably a bit tight for a trial & error exercise based on "advice" from Revenue staff, who may or may not know what they are talking about.

Expressions of doubt on tax returns are generally believed to be a shortcut towards selection for Revenue Audit. For that reason, accountants and other tax specialists rarely recommend that they be included on tax returns although some posters here seem to think the opposite.
 
If you submit your income return online at ROS, then it will calculate any PRSI and USC due.

Your tax payment due end Oct (or mid Nov, if paid online) is the balance due for 2011 plus the preliminary tax for 2012.

The balance = tax+PRSI+USE due - preliminary payment made last Oct/Nov

The preliminary tax due = 100% of 2011 tax or an estimated amount

If the estimated amount turns out to be less than 90% ot the real amount as calculated next year, then you could be open to interest and penalties for late payment.
 
jpd said:
If you submit your income return online at ROS, then it will calculate any PRSI and USC due.

Your tax payment due end Oct (or mid Nov, if paid online) is the balance due for 2011 plus the preliminary tax for 2012.

The balance = tax+PRSI+USE due - preliminary payment made last Oct/Nov

The preliminary tax due = 100% of 2011 tax or an estimated amount

If the estimated amount turns out to be less than 90% ot the real amount as calculated next year, then you could be open to interest and penalties for late payment.
Click to expand...

No penalties, "only" interest.
 
I thought it had to be at least 90% of 2011's payment.

I paid 90% preliminary tax but know it's going to be a LOT less. Basically, the house is rented to a tenant claiming social welfare and, due to last years budget, the rent had to be significantly reduced.

Ah well, I suppose I can claim tax back next year (if the government has any money left :D)
 
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