Joint Assessment?

[CorkMammy]

Hi folks,

I'm on maternity leave at the moment and my employer doesn't pay any top-up on the State maternity benefit, so I'm looking at transferring some of my tax benefits to my husband to see if that would be of benefit to us.

We're currently assessed separately. We each have the bog-standard credits, but I'm not sure how to allocate credits and the cut-off to benefit us best.

My earnings before I started mat leave amounted to E19,612.50, so that will be my total earnings for the year. My husband's earnings will be E48,000 before bonuses, etc. are added on.

Any advice on how our tax credits and standard rate cut-off point should be allocated would be much appreciated.

Many thanks.

 

[ClubMan]

I don't think that you can change to joint/aggregated married taxation at this stage of the year and may have to balance things up at the end of the year via P21 balancing statement based on your request for joint/aggregated assessment. Just contact Revenue and ask them. They will generally apportion credits etc. in the most beneficial way for the couple involved.

 

[Jimbob2]

Yes. As far as I'm aware (not a tax expert) Revenue doesn't have to change your tax credits or the way in which you are assessed, but if you request it, they generally do. However you'll probably have to wait and do a tax return next year. In that make sure you request that for 2008 you wish for your husband to be the principal earner. As Clubman says, contact them and they'll talk you through it. You will not however be using your the full entitlement to the lower rate of tax between you. If your husband becomes the principal earner you can earn earn up to approx. €26k at the lower rate and your husband can earn approx. €44k at the lower rate. However, given that you are only going to earn €19k this year, unfortunately you can't give your husband the credit of extra €7k at the lower rate.

For example a married couple earning more than the standard rate cut off each will get approx. €70k at the lower rate, whereas in your case you'll get approx. €64k at the lower rate and your husband will pay high rate of tax on approx. €4K.