Self-employed and income tax

B

Bean deas

Registered User
Messages
17
My partner and I are self-employed and are jointly assessed for tax purposes. Between us we earn approximately 185,000 per annum. Our tax bill for 2011 came to 46%. I know it may be hard to judge without knowing more details but does this seem high? Any comments will be welcome.
 
It isn't clear what kind of comments you are looking for.

.. does this seem high?
Click to expand...

in absolute terms? ie is this the correct amount of tax?
in relative terms? ie compared to someone else in Ireland, UK, US, ...
in national terms? does the state depend too much on income tax to collect rather than VAT, wealth tax, fixed charges?
 
Total Income €185,000.00
Tax @ Lower Rate (20 %) €13,120.00
Tax @ Higher Rate (41 %) €48,954.00
Tax Credits (€3,300.00)
Net Tax (€58,774.00)
PRSI (€7,400.00)
Universal Social Charge (€11,588.00)
Total Deductions €77,762 is 42% so 46% seems high.
 
Thank you Joe 90 and J. Ryan for your replies. Yes I'm including everything in the 46% - PRSI and the levy (everything that we have to include when we pay our tax in November). Any other comments will be welcome.
 
Do you have the notice of assessment for 2011, you could compare this to the computation and see where the difference is.
 
Bean deas said:
...
(everything that we have to include when we pay our tax in November)
...
Click to expand...

You'd need to break this payment down. It's possible that it contains a balance due in respect of 2011 plus preliminary tax for 2012 of 100% of 2011 liability. That could explain the discrepancy between Joe_90's calcualtion of 42% and your 46%.
 
The USC calculated above assumes neither taxpayer is liable for the 3% surcharge on income over €100,000.
It is also possible that you are quoting the joint income after capital allowances have been deducted, whereas some capital allowances (e.g. rental) are not deductible before calculating USC.
 
Gervan said:
The USC calculated above assumes neither taxpayer is liable for the 3% surcharge on income over €100,000.
It is also possible that you are quoting the joint income after capital allowances have been deducted, whereas some capital allowances (e.g. rental) are not deductible before calculating USC.
Click to expand...

Very true - but it wouldn't give rise to such a big difference.
 
You must log in or register to reply here.
Back
Top