Low income self employed - should I transfer allowances to spouse

M

mile515

Guest
I am a stay at home dad doing some web site work during my son's nap times. My 2009 profit was just over 5k.
I will be submitting my 2009 tax return as a sole trader.

Should I transfer my tax free allowances to my spouse, a PAYE worker?
 
mile515 said:
I am a stay at home dad doing some web site work during my son's nap times. My 2009 profit was just over 5k.
I will be submitting my 2009 tax return as a sole trader.

Should I transfer my tax free allowances to my spouse, a PAYE worker?
Click to expand...

You can give ker the larger tax band.

In regard tax credits, you dont get paye credit and you need €1k of married tax credit to cover your tax bill share.( Transfer balance after covering your own tax nill)

What is wife salary?
 
Absolutely, for cashflow purposes this makes sense. Just beware that you will have less to shelter your income come 31 Oct.
 
papervalue said:
In regard tax credits, you dont get paye credit and you need €1k of married tax credit to cover your tax bill share.( Transfer balance after covering your own tax nill)

What is wife salary?
Click to expand...
I understand that I don't get PAYE credit.
What do you mean that I *need* €1k of married tax credit ?

Her salary is around 80k.
 
Paddy199 said:
Absolutely, for cashflow purposes this makes sense. Just beware that you will have less to shelter your income come 31 Oct.
Click to expand...
What is happening on October 31?

Aside: for 2010 I can ask my wife's payroll dept to make the change (though I assume that I will have to ask Revenue to send out a new tax cert to them). For 2009 we will have to submit a tax return.
 
Mile515,

Your wife's payroll department can do nothing. You have to contact Revenue and they sent out a new tax credit cert to the payroll department. Use PAYE online to register and get all your tax credits. http://www.revenue.ie/en/online/paye-anytime.html

On 31 Oct 2010, you must file a Form 11 and pay any liabilities due. As you have have already used your tax credits against your wife's income, you have less credits to shelder your income. However, you don't have much in 2009 so you should be alright.
 
mile515 said:
I understand that I don't get PAYE credit.
What do you mean that I *need* €1k of married tax credit ?

Her salary is around 80k.
Click to expand...

The way it should work is:

Wife: 45,400 band at 20% and balance at 41%

Husband 5,000*20%= 1000 tax due


the tax credits you both have

married(1830*2) 3660
Wife Paye 1830

Your tax bill will have to be paid some how

choice

1. Give wife 3660 tax credit- Them 1k Becomes payable when joint tax return done at year end

0r

2. hold 1k credit yourself and give wife 2660 of married credit- Them when you come to do joint tax return the 1k tax bill on you is covered by 1k tax credit

Check what tax band wife is working off now, If below 45,400 she could be overpaying tax which could also cover 1k

Tax Return

add two incomes- Tax them and take off tax credits and any paye paid.

If you give break up of tax bands and credits between you and wife now-We can tell if you are on right track

Hope above explains it
 
I did use ROS for my 2008 income (which was PAYE, redundancy and self employed income), and will be using it for 2009 income, so I am set up there.

I'll give Revenue a shout to sort out a tax cert (might even get wife to register for the PAYE Anytime service).

Thanks for the advice papervalue and Paddy199.
 
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