maternity and tax implications

G

giolla

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My husband and I are individually taxed.
I am earning approx 52k per year and he is on 46k.
I will be on maternity for 18 weeks next year.
I will not receive any pay from my company while on maternity.
So at a guess that means for the year my earnings will be reduced to 34k (minus 18k). Any possible by a lot more if I decide to stay at home for an extra few month swith the baby. (which would all happen in one tax year)
I am wondering is it better for us to be taxed as a married couple?
For example I pay for a pension and investment property (both of which get tax relief at higher rate). Would it mean that my pension and investment income would now possibly have relief of only 22%?
 
Why are you not already taxed on joint/aggregated married taxation? At worst it should leave you no better or worse off and at best it may leave you better off - especially if either of you ever end up in the 20% bracket.
 
I thought this thread would answer my question, so sorry to jump in here, but little point in adding a new thread for almost the same question.


Next year when doing my taxes, how will I account for my wife's maternity leave? Similar to above, during the 6 months she was off work she took no salary. However she was paid by social welfare. Is this supposed to go on the Form 11 somewhere?

Thanks.
 
By "paid by social welfare" do you mean ? If so then note that MB is not taxable. Other than that you simply account for your joint taxable earnings (assuming that you are not taxed as two separate individuals for some reason) and work out the joint liabilities from that. [broken link removed] might be of some for at least estimating if not actually calculating the damage.
 
so if my husband and I are jointly assessed. An we drop to a combined wage of 74k for the year.

Does this mean I can still claim 42% tax relief on my pension and income from investment property?
Is it better to nominate my husband as the assessable spuse. And what does this mean all the tax comes from his wages?
 
You can claim 42% tax relief on any income that you are paying that rate on. In general it makes sense to nominate the lower earning spouse as the assessable spouse especially if the lower earner is on 20% in which case the additional standard rate band increase and transfer will benefit the couple.
 
so currently I am the higher earner but we are both on 42% rate. But with maternity year next year my husband will be the higher earner. So should it me that is the assessed.
I am very confused as to how it should make any difference. I would have thought either earner nominated would mean the same outcome. Becuase the amount of earnings would be the same.
 
Have you tried the tax calculator that I linked earlier to model the different situations?
 
thank you for that link I tried it at first it looked like it wasn't working. But it was just very slow to appear on my machine.
I put both incomes in as separate and as joint. Both figures some out the exact same for return of tax at the end of the year.
I think it is because I will still be on the higher rate of tax if I only tax the 4 months off for maternity.
I am still confused by your comment abot who should be elected as the assessable spouse though.
 
ClubMan said:
By "paid by social welfare" do you mean ? If so then note that MB is not taxable.
Click to expand...
Yes Clubman, thats exactly what I meant. Thanks as always for your info/advice.
 
AFAIK it does not make any difference who is the assessable spouse etc as all monies owed/owing can be sorted out after year end anyway. Clubman is suggesting that your husband be the assessable spouse for next year as he will have the higher income, this would save you the paperwork of claiming repayments from the revenue were you to work less than you currently expect to.
 
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