Leaving Cert Business Taxation: Distinguish between the followin

Question

Distinguish between the following taxation forms: Form P21 and Form P60.

Form P21 is known as a 'balancing statement.' All PAYE taxpayers are entitled to request a Form P21 annually from the Inspector of Taxes. It is an end of year summary of an employee's tax situation and contains all details of income, allowances and the calculations of the tax payable at the various rates for the year. Form P21 will indicate if an employee has overpaid or unpaid tax for the year. If an employee has overpaid tax, the Inspector of Taxes will issue a tax refund. If an employee has underpaid tax, the Inspector of Taxes will issue a tax demand.

Form P60 is issued by an employer to each of his/her employees at the end of each tax year. It is a certificate which shows details of gross pay, tax and PRSI deductions made during the year. After 31 December each year, all PAYE taxpayers receive from their employers a Form P60 which has two parts. A PAYE taxpayer has a statutory right to this document and it is used as proof of income for various purposes, e.g., education grants.

Distinguish between the following taxation forms: Form P21 and Form P60 - Leaving Cert Business - Question A - 2007

Worked Solution & Example Answer:Distinguish between the following taxation forms: Form P21 and Form P60 - Leaving Cert Business - Question A - 2007

B. From the following information, calculate the net annual take-home pay of Ms. Joan McCormack.

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