Tax help for retired parents

Hi,

My Mother and father are both 67 years old. The only tax credit they have is the 20% for private health insurance. They pay VHI €3050.00 per year from a private pension (employer before retirement pays the vhi from private pension). They both have a state pension each of 11,975.60 per year. My fathers private pension is €16,806.00 per year before any deductions.

They have a combined total income before any deductions (state and private pension) €40,757.20 per year.

I would be grateful if someone can advice the amount of tax/prsi and usc they should be paying. Thanks in advance.

I have done some searching on line. I would appreciate assistance to confirm or rectify the following calculations for tax.

Total Income 40,757.20
(Marginal relief) exempt 36,000.00
Taxable income @ 40% 4,757.20
40% tax = 1,902.88
less 20% VHI Tax credit 609.70

Total Tax Due 1,293.18

I would be grateful for assistance or any additional advice. In relation to the usc , I have gathered that this is not paid on the state pensions. Only the private pension. Would this be correct.

Hi,
Just to update and in case it may help others in the future. I have rectified the issue.

I contacted the revenue on my fathers behalf and 1,108.00 per year is the tax amount due on the figures I gave. I hope this helps somebody else seeking advice relevant to this issue.

€1108 Tax is very high -- Is this TAX & PRSI & USC?
They would have personal tax credits age credits and a paye credit against the private pension

WindUp said:

€1108 Tax is very high -- Is this TAX & PRSI & USC?

Click to expand...

€1,108 on over €40k is high!!! 2.7% tax after years of austerity.

i havnt done the calculations -- just considering all the tax credits available to the people involved i thought it would be closer to Nil.

WindUp said:

i havnt done the calculations -- just considering all the tax credits available to the people involved i thought it would be closer to Nil.

Click to expand...

The €36k exemption is more generous than any tax credit. You can't claim both.

WindUp said:

i havnt done the calculations -- just considering all the tax credits available to the people involved i thought it would be closer to Nil.

Click to expand...

@windup you might be right

Here's what I would calculate
40,757x 20% = 8,151
Less married Cr 3,300
PAYE Cr x 2 3300
Age Cr 490
€1,061-610=451

Oops! Thanks Joe

The exemption isn't always the best option, there are definitely more credits due and previous poster I would think is correct.

USC on €16,806 private pension: €495

Thanks for all the replies.

1108 is the tax on their earnings excluding the usc. Gervan is correct that is nearly spot on to what he pays in usc. He pays no prsi.

parents are the kind of people that do not question. just pay what they are told to pay or are asked to pay.

The revenue said he will be refunded the over payents he made in his next mounts private pension. They said 1108 is the tax on their earnings they have now calculated. Now I do not know if the 610 for private insurance (20%) is to be deducted from this. Leaving a figure of approx 500 as a yearly tax bill. Which would nearly be in line with joe 90's figures.

Ill wait till he gets his next private pension and update. \Thanks again

ps... I think its terrible the revenue do not simplify this for the over 65s. If I did not notice this. He would have continued to pay this amount and (according to the person in revenue I spoke with) once it goes past 4 years it can not be reclaimed. SHOCKING! IF his tax bill is now approx 500 that is almost 2000 less than what he has been paying per year. I really hope this thread helps or benifits others in the future.

Not just for the over 65s ........

But ...... tax knowledge is higher in countries where you have to do your own tax return evey year ..... Do we want this?