OutlierStudio
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I'm PAYE worker and have ETF gains and so I need file form 11.
At the end I have a Income tax Balancing Amount 2023 as 510 euro. So does the "100% of 2023’s liability" means this balancing amount of 510, so my preliminary tax for 2024 is 510?
Or is it some other figure from the rest of the tax return?
i used to think it's the balancing amount, but not so sure now, because the balancing amount includes preliminary tax as well!
Which would imply this weird situation where this year for e.g. I pay 510 as preliminary for 2024.
Then next year when I file in 2025, imagine i'd have another liability of 510 for 2024 before preliminary tax is subtracted and so then I'd have Income tax Balancing Amount 2024 as zero once preliminary tax is subtracted... so then for preliminary tax for 2025, i'd pay zero? if we just take preliminary to be Income tax Balancing Amount 2024, it would be zero?
Then next year after when i file in 2026, imagine 'id have another liability of 510 for 2025. Since I paid no preliminary tax in 2025 as per above, I'd have a Income tax Balancing Amount 2025 as 510 again, which would prompt me at that stage to pay 510 as preliminary tax for 2026.
In essence it seems if I just keep using Income tax Balancing Amount to estimate my preliminary tax, since the Income tax Balancing Amount itself includes last year's preliminary tax, you get into this weird oscillation where one year you pay preliminary tax, next year you pay no tax, then year after you pay preliminary again.... which doesn't seem like it should be like that?
But then if it's not Income tax Balancing Amount that is use to estimate preliminary tax, then what is?
I don't think I need pay all of my PAYE income as preliminary tax, since I never had to before and by my understanding the whole point of PAYE is that since you pay as you earn, you don't have a net tax liability outstanding at the end of the year, since you already paid it and hence no preliminary tax is due on that.
So that's why I assumed preliminary tax is simply what you pay if you actually have a net liability outstanding at the end of the year (Income tax Balancing Amount)- i.e. you had some income beyond PAYE, for which you never paid tax and now you need to pay it. But because the net liability also includes preliminary tax, it just makes this weird oscillation every year that doesn't seem right to me either.
So do I just ignore this Income tax Balancing Amount 2023 and go back and dig into my Form 11 and try figure out and separate out my PAYE income from ETF tax due and pay w.e. is due for ETF tax specifically as preliminary tax or...?
Thanks
At the end I have a Income tax Balancing Amount 2023 as 510 euro. So does the "100% of 2023’s liability" means this balancing amount of 510, so my preliminary tax for 2024 is 510?
Or is it some other figure from the rest of the tax return?
i used to think it's the balancing amount, but not so sure now, because the balancing amount includes preliminary tax as well!
Which would imply this weird situation where this year for e.g. I pay 510 as preliminary for 2024.
Then next year when I file in 2025, imagine i'd have another liability of 510 for 2024 before preliminary tax is subtracted and so then I'd have Income tax Balancing Amount 2024 as zero once preliminary tax is subtracted... so then for preliminary tax for 2025, i'd pay zero? if we just take preliminary to be Income tax Balancing Amount 2024, it would be zero?
Then next year after when i file in 2026, imagine 'id have another liability of 510 for 2025. Since I paid no preliminary tax in 2025 as per above, I'd have a Income tax Balancing Amount 2025 as 510 again, which would prompt me at that stage to pay 510 as preliminary tax for 2026.
In essence it seems if I just keep using Income tax Balancing Amount to estimate my preliminary tax, since the Income tax Balancing Amount itself includes last year's preliminary tax, you get into this weird oscillation where one year you pay preliminary tax, next year you pay no tax, then year after you pay preliminary again.... which doesn't seem like it should be like that?
But then if it's not Income tax Balancing Amount that is use to estimate preliminary tax, then what is?
I don't think I need pay all of my PAYE income as preliminary tax, since I never had to before and by my understanding the whole point of PAYE is that since you pay as you earn, you don't have a net tax liability outstanding at the end of the year, since you already paid it and hence no preliminary tax is due on that.
So that's why I assumed preliminary tax is simply what you pay if you actually have a net liability outstanding at the end of the year (Income tax Balancing Amount)- i.e. you had some income beyond PAYE, for which you never paid tax and now you need to pay it. But because the net liability also includes preliminary tax, it just makes this weird oscillation every year that doesn't seem right to me either.
So do I just ignore this Income tax Balancing Amount 2023 and go back and dig into my Form 11 and try figure out and separate out my PAYE income from ETF tax due and pay w.e. is due for ETF tax specifically as preliminary tax or...?
Thanks