Post # 1
Ugh FI and I finally sat down and truly looked at combining our finances (one of the issues that really was causing problems – was not going to marry anyone that is not into it financially as well as everything else) and we looked at all of the expenses.
Including tax implications. Let me tell you, if you and your FI make a similar salary you are in for a nasty surprise.
We used a few different tax estimating calculators and the additional taxes will run us between $6000-$8000 dollars.
Ummm wow that was a wedding expense I had not budgeted for. We will find it somehow but with 1 in college and another a year away from college and 4 others to support it was a huge unneeded expense.
Public service announcement – check your taxes and be prepared. Even if you get married on 12/31 then you are counted as married for the entire prior year
Yay fun news!
Post # 3
@unixfairy: This is great information and it was something we were curious about. We do currently have a joint checking account (because we live together for some time and it’s easier to pay our bills that way). However, we don’t make a HUGE salary per year. Honestly, the 2 of us combined, we might be at about $58k a year. Could you give me some of the websites that you used to try this out, so I could do the same thing.
I was always told that sometimes if you file joint married you get a better tax break and sometimes it turns around and bites you in the ass.
Post # 4
::worried face:: yes, references please!
Post # 5
Thanks, that is something to look into!
Post # 6
If you’re going to be penalized for filing together you could file as married but filing separately to save some $$ 🙂
Post # 7
I think this depends on how much you make, honestly. DH and I together made like… well, not very much and we got a MUCH bigger refund filing jointly.
Post # 8
@unixfairy: I was ready for the big tax hit we’re about to get. I didn’t realize that it applied to the whole year. I figured we’d need help from an accountant this year.
Post # 9
I always heard you were taxed less when you were married??
Post # 9
Every couple is different, and tax burdens will vary greatly depending on where you live, what you make, etc.
There’s really no one-size-fits-all rule.
Post # 10
per IRS, you will generally pay more using married filing separately than another status. the rate is higher, you are automatically disqualified for a ton of credits, etc. See IRS publication 17 for details.
if you DO want to use MFS for some reason in spite of the info above, at least make sure to double check if one of you could be head of household.
Post # 11
OK you cannot be head of household and married they are mutually exclusive.
We checked married filing separately vs married filing joint – it is going to be close (within a couple $100) and we will go with the lower of the two
The marriage penalty usually occurs when two people that make relatively similar incomes get married because this pushes them into a higher tax bracket. With disparate income it is not a problem.
I have to run to a meeting – will post links later but turbotax and hrblock both have tax estimator calculators or you can google 🙂
Post # 12
@unixfairy: totally right on HOH, I apologize for my typo!
Post # 13
for 2010 year we had to file married but seperately I would have ended up with $1000 the total that my job takes out from each check so it is basically all mine the IRS never gives me anything back all I get back is the additional $100 I take out monthly from each check.
Than our tax preparer did the married filing jointly and we received and additional $2000 mine you that we both make 2 digit figures in the middle class sector.
Post # 14
@CorgiTales: Not really. My accountant told us that filing married but seperately puts you in the highest possible tax bracket.
Post # 15
I have to say we had zero trouble with this. I’m not sure of the details but we were prepared for a big hit this past tax season since we married in 2010. We filed jointly and had all those worries for nothing. We got a huge refund and had nothing to worry about. We both were making around the same amount. We used turbo tax and considered all the possiblilties since it auto calculates everything each time you switch what you’d like to file as – we could compare instantly. For us filing jointly married was the best option.