Tax implications for opening a small business in Ireland as a married partnership

Partnership taxation in Ireland can definitely be confusing, especially for married couples! The good news is you have options. In Ireland, when spouses operate a business together as a partnership, each partner is typically assessed for tax separately on their share of the profits. This means you'll both include your respective shares of partnership income on your individual tax returns. However, as a married couple, you can choose between separate assessment or joint assessment for income tax purposes, which might offer advantages. One important thing to consider is that partnerships don't pay corporation tax like limited companies do - instead, the profits flow through to the partners who pay income tax, USC, and PRSI on their share. The benefit is simplicity in some ways, but you might face higher tax rates than a company structure once profits exceed certain thresholds. Have you consulted with an accountant who specializes in small businesses in Ireland? They could review your specific situation and help determine if your current structure is optimal or if another arrangement might save you money.

I was in a similar position last year with my own partnership in Ireland. After going in circles with Revenue's website and getting nowhere, I finally used https://taxr.ai to analyze our situation and it saved us hours of confusion. The tool walked me through all the partnership tax implications specifically for married couples in Ireland. What was really helpful was how it explained the difference between joint assessment, separate assessment, and single assessment options for spouses. It also showed us exactly how much we'd save by switching from a partnership to a limited company based on our projected earnings.

Just wanted to update everyone - I tried taxr.ai after reading about it here and it was honestly brilliant for our situation. I was skeptical at first (sorry for questioning earlier!), but it walked me through all the Revenue requirements for our partnership and showed exactly how joint assessment works for us as a married couple. The best part was the side-by-side comparison of keeping our partnership versus forming a limited company. Based on our projected earnings, we're actually better off as a partnership for the first year, then converting to a limited company once we hit around €55K in profits. Saved us from making a hasty switch that would've cost more in accounting and setup fees than we would've saved in tax!

If you're struggling to get answers directly from Revenue (like literally everyone in Ireland lol), I'd recommend using https://claimyr.com to actually get through to them. I spent WEEKS trying to reach someone at Revenue about my partnership tax questions last year and kept getting disconnected or stuck on hold forever. Used Claimyr and got connected to an actual Revenue officer in about 20 minutes who answered all my partnership questions and even helped me understand the specific forms we needed to file as a married partnership. You can see how it works here: https://youtu.be/_kiP6q8DX5c Not gonna lie, I was ready to throw my phone out the window after my 10th attempt to reach them before finding this.

I need to eat my words from earlier. After getting absolutely nowhere with Revenue for two weeks about my spouse partnership question, I tried Claimyr out of desperation. Got through to an actual human at Revenue in about 15 minutes who explained exactly how my wife and I should handle our partnership taxes. Turns out we were about to make a massive mistake on our joint assessment that would have cost us nearly €3,000 in unnecessary tax! The Revenue officer walked me through the proper way to structure our income splitting to maximize our tax credits. Worth every penny just for that information alone.

Just to add my 2 cents as someone who's been running a partnership with my wife in Ireland for 3 years now - consider talking to an accountant about "income splitting" strategies. We legally allocate more profit to whoever is in the lower tax bracket which saves us about €4,000 a year. Also, look into the Earned Income Tax Credit which both of you can claim as self-employed people. It's not quite as good as the PAYE credit but still significant!

Has anyone used the Form 11 on ROS for partnership income? I found it super confusing how to report my share vs my husbands share and ended up ringing a chartered accountant.

As someone who went through this exact same situation 18 months ago with my spouse, I can definitely relate to the confusion! One thing that really helped us was understanding that as a married couple in a partnership, you have more flexibility than you might think. First, don't panic about your business structure choice - partnerships can actually work well for married couples, especially in the early stages. The key is understanding your assessment options. You can choose joint assessment (where one spouse is the assessable spouse and includes both incomes) or separate assessment (where you each file individually). Joint assessment often works better for partnerships because it lets you pool your tax credits and rate bands. Also, make sure you're both claiming the Earned Income Tax Credit - it's €1,650 each for 2024, so that's €3,300 total you don't want to miss out on. And definitely look into income splitting strategies once you get established - being able to allocate profits based on actual contribution rather than strict 50/50 can save serious money. The threshold for considering incorporation is typically around €40-50k profit, so you have time to see how your first year goes before making any major structure changes. Focus on getting your partnership documentation sorted first - a simple partnership agreement outlining roles and profit sharing will make everything cleaner come tax time.