Married recently, now expecting - Tax Implications?

Hi,

Myself and my wife married last august and she is now expecting, due in September. We are just wondering what steps we need to take to ensure we maximise our tax relief while she is no longer earning.

We have both been employed for many years and I would guess have no issues with "stamps" / prsi returns - we should have paid our fair share up to this point.

Thanks to your site, we discovered that the first thing we need to do now is register as married with the revenue, and we can then look at what structure best suits our income tax situation. We both pay tax at the higher rate, so probably not much gain here one way or the other? is that a reasonable conclusion?

Now with the imminent arrival of our first, my wife's employer pays no benefit to her so she will be on statutory benefit. Unfortunately, my wife is not covered under medical insurance, so we will be covering medical expenses ourselves and claiming a refund on the basis of a Med 1 submission.

I suppose my question relating to tax, is that as she will be earning no income from August, what is the best way to manage our tax affairs? Can I claim additional relief on my income, invoking her tax allowances at this point, or is this issue settled by means of her submitting a claim for a tax refund at the end of the year?

With her not earning, what is the best way to ensure we maintain the maximum net income over these tricky months?

Are their any other issues tax or welfare related that I should be aware of?

Thanks in advance guys!

Did you notify Revenue about your marriage last year or since? If not do so now and request a P21 balancing statement for 2007 in case you are owed anything (most likely if one of you is on 41% and the other is on 20% tax). You should probably opt for joint/aggregated married taxation from 2008 onwards (if it's not too late for this year). Doing so will be beneficial if one of you is on 41% and the other on 20%. www.revenue.ie and various posts here have information about married taxation. If you are both on 41% then it will have no adverse impact. What are your respective likely gross incomes for 2008 allowing for the period of maternity leave on MB?

As ever make sure that you are claiming all of the normal/common tax credits and reliefs as outlined in the Taxation forum Key Posts.

Enda 1 said:

Unfortunately, my wife is not covered under medical insurance, so we will be covering medical expenses ourselves and claiming a refund on the basis of a Med 1 submission.

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You are aware that maternity related healthcare is completely free (and actually quite efficient) if you go with the public system?
You just need to fill in a form at your GPs surgery, and then your wife gets 6 free antenatal and 2 free postnatal visits with her GP, and hospital antenatal visits also.
~€3,000+/- extra for private care is a lot and that seems to be ball park figure for going privately.
This also absolutely does not guarantee a private room for your wife, as private rooms depend on on the day availability.
Just a thought.
Nicola
PS congratulations!