Tax - Married or single

[Paddyo]

Hi All

Simple question - but probably not a simple answer.

One spouse on approx €65000 PA and the other on €10500.00.

Are they better off being taxed separately or as a married couple, and if as a married couple what way are the Cutoffs/Credits divided.

Many thanks
Paddyo

 

[Graham_07]

For 2009 max is €72,800 at low rate, max split €45,400 - €27,400 so
spouse on €60,000 can have max cut off of €45,400
spouse on €10,500 would have cut off of €10,500
so in that scenario €45,400+10,500 at 20%, bal at 41%

Singly, its €36,400 at 20% s by going joint the higher earning spouse can increase cut-off from €36,400 to €45,400

With income of only €10,500 that spouse would keep theri PAYE credit of €1,830 which basically covers €9,150 earngins with no tax. Other spouse can get married credits €1,830+€1,830.