Put a ring on it -- and save!
Published 19/01/2014 | 02:30
If you dread the thought of walking down the aisle, think of the tax advantages.
If you are married, you can earn more money before the higher rate of tax kicks in than you would were you single -- particularly if there is only one bread-winner in the family or your spouse is earning a lot less than you.
For example, if you are single, earning €41,800, and you don't have any kids, you can only make €32,800 before the higher rate of tax kicks in. However, if you are married and the only breadwinner in the house, you can earn €41,800 before the higher rate of tax is paid.
There are other tax advantages to getting hitched.
If you own an investment property, shares or other assets, you could shave thousands of euro a year off your tax bill by sharing ownership of those assets with your spouse, according to Oonagh Casey of Fagan & Partners.
Let's say you're a married couple where the husband earns €60,000 a year and the wife is a stay-at-home mum. Your only other income is from a rental property, which generates €8,500 in rent a year -- after expenses have been taken into account.
"The amount of tax paid on the rental income depends on who owns the property," said Casey. "If the rental property is in the husband's name only, he will pay the top rates of tax, PRSI and universal social charge -- assuming he has used up his married rate bands and tax credits on his employment income. This means he would pay tax of €4,420 on his rental income."
However, if the property is in joint names, the tax bill on the rental property would be reduced to €3,230 because the wife's share of the rent would be taxed at the lower tax rate. "If the property is in the wife's name only, the tax bill would be reduced even further -- to €2,040 -- as all of the rental income would be taxed at lower rates of tax," said Casey.
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