Once you
are married, it may be worth contacting your local tax office to advise them,
as you may be due a tax refund!
In the
year of marriage, both partners are treated as single people, if the result of
your assessment as single people is greater than the tax you would pay if you
were assessed as a married couple, a refund of the difference is due to you.
This
rebate usually occurs where a couple are taxed at difference tax rates and
unused tax credits can be availed of by the other spouse.
Whether
you are a married couple or a single person with more than one source of
income, you have certain rate bands and credits available to you with regards
to Tax and USC. In order to ensure you do not overpay tax these allowances
should be allocated according to the level of income between spouses and/or
different sources of income, subject to Revenue limits.
After the
year of marriage review, you can opt to be treated as jointly assessed,
separately assessed or as a single person. We would advise to get advice on
what treatment suits your situation.
So, you
want to be jointly assessed?
Joint
assessment is the most beneficial for a married couple. Tax Credits, reliefs
and rate bands can be allocated between you and you are assessed on your joint
incomes. You will need to select the assessable spouse between you, which is
usually the higher income earner. All filing of returns and payment of tax due
is completed under the assessable spouse.
So, you
want to separately assessed?
When you are separately assessed, both you and your partner
are taxed as single people. Tax Credits, reliefs and rate bands can still be
allocated between you, but you will both complete a single return. If eligible,
the following tax credits are divided equally between you both;
- Married or Civil Partner’s Tax Credit
- Age Tax Credit
- Blind Tax Credit
- Incapacitated Child Tax Credit
So, you
want to be assessed as a Single Person?
This is also known as separate treatment, where you and your
partner are taxed and complete returns as single people. Tax Credits and
standard rate band due as based on a single person. There is no option to transfer
unused tax credits, reliefs or rate bands to your spouse or civil partner.
Also, if you have children, you cannot claim Home Carer Tax Credit.
Under this treatment, if you do not use all of your personal
tax credits, you may end up paying more tax as a couple than you would if
jointly or separately assessed.
Need advice or a year of marriage review? Contact us on 01 539 7999 or log
onto www.itasaccounting.ie
and download our form.
