IFF taxation consultation thread (1 Viewer)

[La La]

if i understand what you're asking, it'd be 20% of the combines income

although if you're setting aside 20% of each payment, it's be the same amount you'd set aside

i should also note that there is also a health contributiona nd prsi on top of this. this comes to 5% i think. so in fact, it should be 25%



yes you can get the single person allowance of €1,830 (if you're married it's double of €3,660 though this is shared between the spouses so in fact it's only still €1,830 if both are working) so in essense this means that the first €9,150 is exempt

there's other credits you can claim like refuse charges and rent credit and these would lower your tax burden also

there's also expenses that can be claimed. in accounts work, we would include a person's motor expenses as a cost. when it comes to the tax return, we usually do an add back of 33%. sometimes it's 50%.

is 2008 your first year as a self employed person? if it's your second i think you also will have to pay preliminary tax for 2008 along with tax for 2007

preliminary tax is 100% of the previous years income (so in thory you double up). i've seen revenue sent out demand notices for alot of money in interest for not paying a few thousand in preliminary tax (i can't go into details)

ok. that's alot to take in but it's stuff i needed to know, so I thank you very muchly. this year is indeed my first full year working since moving back, so thankfully I don't need to count last year. in fact as far as I know, the Daily Star owe me tax money for some work I did for them last year.
i'm definitely going to pursue the tax cxredits thing.
thanks IFF!

 

[jickolas]

hi there

any help here would be brilliant as im freaking out a bit!
i got a 'payslip p & f' reminder in the post have to enter:

income tax preliminary 2008
income tax balancing amount 2007
capital gains tax 1/1/2008 to 30/9/2008

what im most concered about is how to deduct my gross tax credits (€4060) from what i pay/what ive earned
and how to deduct expenses like travel and food

can i deduct them from my total gross?

 

[whathappen?]

just looking at my payslips in digust, especially since I found out what the average wage is €35k . Anyway I was just wondering how are the PRSI codes defined? eg my prsi code is A1, what does that mean?

 

[IFF]

just looking at my payslips in digust, especially since I found out what the average wage is €35k . Anyway I was just wondering how are the PRSI codes defined? eg my prsi code is A1, what does that mean?

A1 is a weekly gross pay of €500.01 or more. you are charged 2% prsi on the first €127 weekly. the balance of which is charge 6%. so in theory if you were on a weekly wage of €510, you would pay prsi of €25.52

Calculation: (127 * 2%) + ( (510-127) * 6%) = 25.52

there are different rates of prsi. a rate of A2 would apply to people who earn over €500 but are on a widows pension, one family person credit, deserted wife or have a medical card. in this scenario, €127 would not be prsi-ed and the balance is at 4%

then there is the A0 class (up to €352. no prsi decuted.) AX (352-356 per week. no prsi on first 127. 4% on balance) and then AL (356 - 500. the same rate as AX)

also on top of this your employer also has to pay prsi on your behalf. For A1 and AL, the employer pays 10.75% while for A0, AX, the employer pays 8.5% (that be what differentiates AX and AL)

that was probably longer then what i should have rtyped. and then there are other letter's for different people.

 

[whathappen?]

Thanks IFF

 

[IFF]

hi there

any help here would be brilliant as im freaking out a bit!
i got a 'payslip p & f' reminder in the post have to enter:

income tax preliminary 2008
income tax balancing amount 2007
capital gains tax 1/1/2008 to 30/9/2008

what im most concered about is how to deduct my gross tax credits (€4060) from what i pay/what ive earned
and how to deduct expenses like travel and food

can i deduct them from my total gross?

the pay & file thing is more a statement of net liabilities. it would be summary of the tax. to do a tax return, you'd need the form 11 and this is where you enter the stuff

do you paper file or e-file?

On the form 11, you put in the net profit on the self employed income part. this is the profit after travel and food.

you would also have to provice accounts extrac and you would put in the travel and food portion in the motor, subsistence section.

whatever you do, take my advice, add back a portion of food and travel expenses for the profit figure while having the full motor and food in the accounts extractions. there is a part where to put in the added back at the bottom of the accounts extract part.

the reason why is that in aa worse case scenario, revenue audit would see no add back and get to pick the charge themselves. this way, you are the one and in a revenue audit, you are adding back the amount and they can see this.

the tax credits have a specific section. you are automatically enterred as a single person (unless you're married. then you are automatically as a married person) if you are filing online.

for the other categories you have to tick a box for the credit

may i also advise. when claiming credit, don't forget the rent credit and also if you pay bin charges, this is also deductable along with any medical expenses incurred in 2007

i hope i've been clear in what i',m saying but i doubt it so any clarification, i;d be happy to give

 

[jickolas]

thanks so much for this.

i regeistered for income tax and everything. i think it was a form 11 i used.

im not registered yet online and ive been told it takes a while so im just doing it by post

i just need to know what to put on the slip that i got in the post, it has to be returned by 31st oct.

Sorry about the base level of this, but is it:

everything i earned since jan 2008
minus
travel + expenses +medical (have reciepts)
minus
tax free allowance

then take 21% from the remaining sum?

is that my preliminary sum for 2008? and do i send them a check now for it?

 

[IFF]

thanks so much for this.

i regeistered for income tax and everything. i think it was a form 11 i used.

im not registered yet online and ive been told it takes a while so im just doing it by post

i just need to know what to put on the slip that i got in the post, it has to be returned by 31st oct.

Sorry about the base level of this, but is it:

everything i earned since jan 2008
minus
travel + expenses +medical (have reciepts)
minus
tax free allowance

then take 21% from the remaining sum?

is that my preliminary sum for 2008? and do i send them a check now for it?

the easiest calculation for preliminary tax 2008 is that it's 100% of the liability for 2007

though is 2008 your first year as a self employed person? if so, then there is no liability for preliminary tax. however you are better off paying preliminary tax. this way it lessens liabillity for next year.

to get a calculation for tax, this is a simple example based on figures from my head

i will assume single person and i will use 2008 tax credits

Earnings _____________€42,000
Travel expenses _______(€4,000)
other expenses _______(€1,000)
Profit ________ _______€37,000

Less medical expenses (€500)
____________________€36,500

this is then taxed:

€35,400 @ 20% ______€7,080
€1,100 @ 41%_________ € 451
____________________€7,531

Less TaX credits_____(€4,060)
___________________€3,471

On top of the 3,471, there would be a prsi and health contribution which total 5%(1% income levy comes into effect in 2009 i think). This is on the €36,500 which would add another €1,825

 

[jickolas]

thats brilliant IFF thanks a million. i think i have it sussed now

 

[therealjohnny]

This is probably a no-brainer but anyway

A while ago when i had a decent job the girl in Irish Life convinced me that "payment protection" was a good idea

I pay a certain amount to insure that should I lose an arm or something that would leave me unable to work, whatever benefits I get will be bolstered by what I've been paying in ( i think that's how it works?)

But, I've been wondering, I'm now in a minimum wage, 11 month contract job, no pension or any other benefits

Should I knock the payment protection on the head and put that cash towards a pension instead?

 

[IFF]

This is probably a no-brainer but anyway

A while ago when i had a decent job the girl in Irish Life convinced me that "payment protection" was a good idea

I pay a certain amount to insure that should I lose an arm or something that would leave me unable to work, whatever benefits I get will be bolstered by what I've been paying in ( i think that's how it works?)

But, I've been wondering, I'm now in a minimum wage, 11 month contract job, no pension or any other benefits

Should I knock the payment protection on the head and put that cash towards a pension instead?

it's a tough question for me to answer. i'm not very familiar with payment protection. i was talking to the guy from BOI life two years ago when i was setting up a fund account for the BOI evergreen policy (good investment. lost 40% only since setting up) and he said next time we meet that it should be considered. didn't do anything. this evergreen fund was reccomended as opposed to a pension as i was not paying tax at the time (low salary. although i obviously was able to save money but that's more my lifestyle in having little expenses and living with parents - to the question he had asked about weekly outgoings, i responded that my mother was my biggest outgoing )

it's personally up to yourself. pensions aren't great if you're not paying tax.

while the payment protection is probably not great either as it is, not of no benefit, but of minimal benefit. it would depend on the benefits of payment protection. are there any long term benefits

 

[pete]

payment protection insurance always seemed like a bit of a scam to me

 

[maims bond]

(good investment. lost 40% only since setting up)

erm...

 

[IFF]

erm...

well the market has lost 41% (actually the irish stock market i think has lost 70% in the last 18 months or so but imight be very wrong)

though it was sarcasm

though boi life apparently guarantee losses if you keep investing in the fund for 5 or 7 years

 

[maims bond]

well the market has lost 41% (actually the irish stock market i think has lost 70% in the last 18 months or so but imight be very wrong)

though it was sarcasm

though boi life apparently guarantee losses if you keep investing in the fund for 5 or 7 years

erm..........???????????

 

[Denny Oubidoux]

i have a question about the rent relief thingy. im now abroad but i told mammy to send in the form for claiming tax back on the rent. she did this around march i think, or maybe may or june, and there hasnt been a word about it since. all that was missing on the form was the landlords pps number (landlord was unhelpful about the whole thing, and delayed returning forms in the hope i'd forget or leave the country) but Sufi told me that the tax people would be able to get this themselves anyway. is there a way mammy can sort this out? i was hoping to get two or three years worth and it'd be dead handy now.

 

[IFF]

i have a question about the rent relief thingy. im now abroad but i told mammy to send in the form for claiming tax back on the rent. she did this around march i think, or maybe may or june, and there hasnt been a word about it since. all that was missing on the form was the landlords pps number (landlord was unhelpful about the whole thing, and delayed returning forms in the hope i'd forget or leave the country) but Sufi told me that the tax people would be able to get this themselves anyway. is there a way mammy can sort this out? i was hoping to get two or three years worth and it'd be dead handy now.

if it was even in june i would imagine it should have been refunded

the only reason it might have been delayed is that yout landlord was not registered for tax (also explain why he was delaying himself) but i can't imagine that it's taken 4-5 months even if he's not registered

i think the only way to it is to ring them, explain about sending the rental form and ask them what is the delay and when could a refund be expected

 

[Denny Oubidoux]

if it was even in june i would imagine it should have been refunded

the only reason it might have been delayed is that yout landlord was not registered for tax (also explain why he was delaying himself) but i can't imagine that it's taken 4-5 months even if he's not registered

i think the only way to it is to ring them, explain about sending the rental form and ask them what is the delay and when could a refund be expected

ok thanks. so even if the landlord wasnt registered i should still get a refund?

 

[IFF]

ok thanks. so even if the landlord wasnt registered i should still get a refund?

i would say so. you should.

anyone if he wasn't registered, he'll be revenued audited and the revenue will get their pound of flesh and then some more

revenue audits are not nice things. i think a person who's evading tax now a day is wasting their time and in the end, they will be caught and they will pay alot more then they would have (the taxes, interest and then penalties which could range from 5% oif liability to 100%)

 

[paula]

a few months back i had just started a job and was put on emergency tax. at the same time, i received a back payment from another job i finished ages ago, and this was hit with the emergency tax too. i got the money back from my actual job as obv more payments were made to me, but the back pay was a once off. any idea as to how i would go about getting the money back?