Most efficient way to treat side income

[Bearsandbulls]

Hi All,

I am looking for advice on the most tax effieicnt way to treat a second income stream for my wife that is growing.

She is a part time public sector worker with an income that ranges between 25k to 40k per annum.
She now has a second income stream that is growing. It will probably cap out in the region of 15k to 20k per annum.

I earn approx 90k so this, coupled with here lower salary mean her tax credits are currently being utilised by me.

We are looking at the process of setting up a PRSA for her additional income with the intention to on a yearly basis to maximise her 20% earnings threshold (33k) and claim penison relief on amounts above this.

Does this make sense or is there a smarter way to do things?

Would it make more sense to set up a company and pay all proceeds into a PRSA or am I mistaken in beleiving this is possible? Is the level of extra income not worth the trouble of doing this?

 

[johnsamir]

Hi All,

I am looking for advice on the most tax effieicnt way to treat a second income stream for my wife that is growing.

She is a part time public sector worker with an income that ranges between 25k to 40k per annum.
She now has a second income stream that is growing. It will probably cap out in the region of 15k to 20k per annum.

I earn approx 90k so this, coupled with here lower salary mean her tax credits are currently being utilised by me.

We are looking at the process of setting up a PRSA for her additional income with the intention to on a yearly basis to maximise her 20% earnings threshold (33k) and claim penison relief on amounts above this.

Does this make sense or is there a smarter way to do things?

Would it make more sense to set up a company and pay all proceeds into a PRSA or am I mistaken in beleiving this is possible? Is the level of extra income not worth the trouble of doing this?

Contribute up to 20% of your wife’s total income to a PRSA for tax relief. Review tax credit allocation and consider joint assessment for better tax savings. Setting up a company is likely unnecessary for her level of extra income. Seek professional advice for optimal tax strategies.