With last month’s change to the VAT rate of hotels and hairdressers, tax is a hot topic in bridal circles at the moment. But could you be due an income tax refund and if so, how do you go about claiming it – and turning it into centrepieces or bridesmaid shoes? Alison Moloney from ReduceYourTax.ie joins us today with the ins and outs of this taxing issue.
[box]Unfortunately with economic times the way they are today, planning a wedding revolves more around the budget than chair covers and flower arrangements! Couples planning a wedding will do everything to save as much money as they can to ensure they have the day they both dream of.
But, most couples never think of reviewing their PAYE taxes for any tax refunds which may be due to them. The Revenue Commissioners will issue refunds as far back as 2007 and www.ReduceYourTax.ie estimate over 60% of persons are due a tax refund and the average refund exceeds €770 per person. That means there are engaged couples out there who could be at least €1,540 better off, planning their wedding day!
But why would somebody be due a tax refund and how does one go about claiming it?
There are an endless number of reasons why somebody may be due a tax refund and ultimately everybody’s personal circumstances differ. However the most common reasons are as follows:
- Employer deducted the incorrect tax from your salary.
- Changing jobs more than once throughout the tax year.
- Tax credits not updated correctly with the Revenue Commissioners.
- Not claiming all available tax credits and reliefs e.g. medical expenses, bin charges, flat rate expenses etc.
There are a few ways in which a person can check if they are due a tax refund. They can phone their tax office, they can register with the Revenue Commissioners online PAYE anytime system on www.Revenue.ie or they can contact www.ReduceYourTax.ie and they will process the full application on their behalf.
In addition to reviewing taxes for potential refunds, couples planning to get married should carefully plan in advance how to set up their taxes once married in order to minimise the total tax paid each year as a married couple.
Year of Marriage – couples are treated as single persons during the year of marriage for tax purposes. However following the year of marriage they can contact the Revenue Commissioners requesting a ‘Year of Marriage’ review. Depending on the wedding date and the couple’s incomes they may be due a tax refund simply as a result of getting married. This refund will not be issued unless the Revenue Commissioners are contacted and a Year of Marriage review is specifically requested.
Following the year of marriage – in most cases it is advisable that couples immediately register as jointly assessed. In these circumstances unused tax credits and 20% cut off bands can be shared between spouses. Also where one spouse is not working or earns below €5,080 during the year the Home Carer’s tax credit can be claimed. This is worth €810 in 2011. Worst case scenario, if a couple do not register as jointly assessed they could end up paying additional taxes in the region of €4,500 each year. A couple should never pay more taxes as jointly assessed.
Whether planning a wedding or not every individual should regularly review taxes for any refunds due – it’s your money, you earned it so make sure you claim it today!
Alison Moloney A.I.T.I
Share the quirkTweet