Tax assessment as a married couple?

D

djmac

Guest
Hello,
This is my first post so hoping somebody can enlighten me as both myself and my husband are not sure how we shoud be assessed.

Background - we will be married 2 years this July and had our first child at the end of last year.

When we got married I asked my financial controller in work about changing our status for tax assessment and he said to contact local tax office and they would do it. When I contacted them she asked if we wanted to be joint assessed or separate, since we both earned around the same amount I said separate so as far as i can figure out, this means we are both technically assessed as if we were still single? (can someone explain why people always go on about how married people get a better tax break then??)

I have taken 2 pay cuts over the last 2 years so now earn a good bit less than my husband and I am on maternity leave at the moment so was using the taxcalc website to figure out what my take home will be when I return to work. When I put in married it gave me a higher figure than single but the figure for single is what I earn so again, I thought I got some sort of better tax free allowance for being married?

And last question, now that I am earning less, should I contact the tax office again and change to joint assessment so that my husband gets more of my tax credits or how does that all work out?

Thanks for reading and hopefully someone can point me in the right direction.
 
I will try to answer your question

djmac said:
can someone explain why people always go on about how married people get a better tax break then??) .
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There is only a tax advantage when one of you is earnings nothing or only paying tax at the low tax rate,so have some pf your tax band not being usedand can be transferred.

If someone told you that just being married meant that you automatically paid less tax, they were wrong.

djmac said:
I have taken 2 pay cuts over the last 2 years so now earn a good bit less than my husband and I am on maternity leave at the moment so was using the taxcalc website to figure out what my take home will be when I return to work. When I put in married it gave me a higher figure than single but the figure for single is what I earn so again, I thought I got some sort of better tax free allowance for being married?
Click to expand...

If you put in the details of your salary into the tax calculator, said you were married and did not put your husbands salary it, the tax calculator would assume that yours was the only income in the family and transfer all your husbands tax credits to you.

And last question, now that I am earning less, should I contact the tax office again and change to joint assessment so that my husband gets more of my tax credits or how does that all work out?
Click to expand...

If you are on unpaid leave and/or are earning less than your husband, you should ask to be changed to joint assessment.

They can move some ( but not all) of your tax credits and tax bands to your husband. This may mean that your income goes down and his goes up, but the overall tax bill between you will be less.
 
Have a look at this page on Revenue site: http://www.revenue.ie/en/personal/circumstances/marriage.html#section4

Married couples get a tax benefit to the extent that tax credits, as well as a portion of the standard rate band (ie the amount you can earn before hitting the high rate of tax) can be transferred between spouses to make the best use of them.

Joint assessment means that at any point during the tax year you can move the credits / band between spouses. Under separate assessment, you are both treated as single during the year, but after the year-end you can request a review and unused credits / standard rate band can then be transferred...
 
Of the 3 assessments :

1. single assessment
2. separate assessment
3. joint assessment

The tax office will always give you whichever is more beneficial to you , during an end of year review . (request a P21 balancing statement )
 
Joint assessment is always more beneficial. On this basis of assessment you will, at the worst, pay the same amount of tax as if you were both single individuals. If one of you earns less than the other there is always a possibility of transferring unused credits or rateband between you - meaning the higher earner will pay less tax. This transfer can be done at any point during the year (or once the year is over if you prefer).

Separate assessment ends up with the same tax liability as joint assessment, but you can only transfer the unused credits/rateband at the end of the tax-year.

Single treatment (separate treatment) means you are taxed as two single people. No transfers of any unused credits/rateband at all.
 
Thanks for all the feedback guys and that explains things a bit better. I will get onto the tax office and ask to be changed to joint assessment from now on, as I am on a reduced wage and will be also taking unpaid leave at the end of my mat leave so hopefully it all balances out somewhere and might benefit my husbands paypack.

And thanks for clearing up the myth about married couples getting these great tax breaks :)
 
I think you may need to fill up the form "Taxation of Married Persons" as they require the agreement of both parties.
You can specify on the form how much of your Tax Credits and SRCOP you wish to transfer to him
 
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