Married & Tax - Please Advise

T

Tonash

Registered User
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Hi there

Just wondering if someone would be kind enough to advise me on what to do.

I got married at the start of this year and am about to call Revenue to advise them of same. Ive been told that myself and my husband can be taxed in 3 different ways. Individually (as we are now), married but taxed separately or taxed jointly.

I earn 33,000 pa and my husband 35,000. Which would be the best option for us??

Many thanks in advance.
 
Generally joint/aggregated married taxation (your third option above) is most beneficial or is no worse than the other options. Taxed separately as a married couple just means the same but you have to process any claim for pverpayment of tax each year rather than getting it automatically via your tax credits. Being taxed as two separate individuals may penalise you so there is usually no reason to opt for it.

Once you opt for one of the married taxation options you may need to ask Revenue for a P21 balancing stagement for 2007 to get any refund of tax overpaid. You can use www.taxcalc.eu to estimate the difference between being taxed as two separate individuals (enter your individual details separately and note the end of year take home figure) versus married (joint/aggregated) enter your joint details and compare. Note that the calculator is configured for 2008 tax details by default so choose 2007 for this year's results.
 
Oops - just tried www.taxcalc.eu myself and I get (for 2008):

Single person earning €32K:
Yearly take home pay. (Single)
Selected Tax year is 2008
Gross Take Home Pay = € 32000.0
Tax = € 2740.0
Take Home Pay after Tax = € 29260.0
Less PRSI = € 1655.8401
Net take home pay = € 27604.16
Click to expand...
Single person earning €35K:
Yearly take home pay. (Single)
Selected Tax year is 2008
Gross Take Home Pay = € 35000.0
Tax = € 3340.0
Take Home Pay after Tax = € 31660.0
Less PRSI = € 1835.84
Net take home pay = € 29824.16
Click to expand...
That's €57,428.32 combined.

Married couple earning €32K plus €35K:
Yearly take home pay. (Married)
Selected Tax year is 2008
Gross Take Home Pay = € 67000.0
Tax = € 6080.0
Take Home Pay after Tax = € 60920.0
Less PRSI = € 1835.84
Less Spouse PRSI = € 1655.8401
Net take home pay = € 57428.32
Click to expand...
So for 2008 there should be no difference (not that the specific figures for your situation may be slightly different if your specific tax credits are different to those assumed by the calculator).
 
For 2007:

Single person earning €32K:
Yearly take home pay. (Single)
Selected Tax year is 2007
Gross Take Home Pay = € 32000.0
Tax = € 2880.0
Take Home Pay after Tax = € 29120.0
Less PRSI = € 1655.8401
Net take home pay = € 27464.16
Click to expand...

Single person earning €35K:
Yearly take home pay. (Single)
Selected Tax year is 2007
Gross Take Home Pay = € 35000.0
Tax = € 3690.0
Take Home Pay after Tax = € 31310.0
Less PRSI = € 1835.84
Net take home pay = € 29474.16
Click to expand...
Total = €56,938.32

Married couple earning €32K + €35K:
Yearly take home pay. (Married)
Selected Tax year is 2007
Gross Take Home Pay = € 67000.0
Tax = € 6360.0
Take Home Pay after Tax = € 60640.0
Less PRSI = € 1835.84
Less Spouse PRSI = € 1655.8401
Net take home pay = € 57148.32
Click to expand...

So in 2007 you should be marginally better off on joint/aggregated married taxation.
 
In short - you are probably best off opting for joint/aggregated married taxation since you may be better off (now or in the future) and you should be no worse off. You need to note how the standard rate band and allowances are allocated though as one spouse may get a shock if they are allocated mainly to the other spouse and they find that they get a lot less via payroll as a result even if the aggregated amounts are correct!
 
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