Post # 1
Hi any advice suggestions comments on pending income tax doom?
How has it affected fellow married couples? Ill put our general basics if anyone can compare with us.
He works for the county so he makes a lot however he looses a bout load in taxes and other deductions. probably close to a 40% reduction in take home.
He owns the house and the cars.
I make 1/3 to 1/4 of what he does – but I have loads of student loans and interest payments to come off of that.
We have no children either.
MY FH is freaking out about this because he owns the house and makes all the money so he used to get a decent tax return, usually enough to make a minor home repair or replacement. And he has heard that most people end up having to pay in after marriage… which neither of us has had to do! However I am thinking most of his coworkers have a higher income 2nd earner in the house.
I know I know contact my tax represenative person and eventually we will figure that out, I’d just like to get an idea of what others have been through and any suggestions or what you did to alleviate the situation.
Post # 3
Generally if you have one low/medium earner amd one high earner, you end up paying less tax than when you file separately. It’s only when your incomes are fairly equal that you end up owing. Go see a CPA anyway— I’m just saying what’s “usual” and not knowing your entire income/deductions/contributions so far towards 2013 taxes, I can’t say with any certainty that’s how it will work out for you.
Post # 4
@Horseradish: This is what happened with us. My low income was enough to knock him down a bracket and we got a big refund the year after we got married.
Also keep in mind that what you owe or are owed when you file is just a reflection of how accurately you gauged what you would end up owing throughout the year. See if you can take a look at your W-4 and adjust it if need be to get closer to that break even point.
Post # 5
I’ve never heard of owing more on taxes because of marriage, can anyone elaborate on that? If you both work and claim the same deduction on your w2 before and after marriage doesn’t the amount owed stay the same?
Post # 6
I know one of the things that some married couples have been is that they go through and make up two tax returns one for filing jointy and one for filing separatly and go base off of what would get them more money.
Post # 7
@mseagles: We’re going to owe more because we get knocked up a tax bracket once we’re married. This chart shows the breakdown: http://www.bankrate.com/finance/taxes/tax-brackets.aspx
For example, I’m in the 25% tax bracket and Fiance is in the 28% tax bracket, but once we’re married, our joint incomes put us in the 33% tax bracket. We definitely need to make itemized deductions!
Since there’s such a disparity in what you make, you’ll probably actually get the marriage benefit (getting knocked down a bracket). You should also get a good deduction for the interest off student loans too. Talk to a CPA since they’ll know your state and federal laws best.
Post # 8
@crisaquarius24: Between the two of you you’ll likely be better off filing as a married couple. It’s families with two high income earners who usually pay the “marriage tax.”
Post # 9
IDK but we make the same amount and last year was our first year filing jointly and it was about the same as our prior year’s returns separate.
Post # 10
@mseagles: It’s to do with the way tax rates are assessed in the US for married vs. single filers. You can find out more about it here:
Post # 11
2 people filing jointly who make about the same amount = no affect (unless you are both on the high end of your current single filer tax bracket, than filing jointly will likely bump your tax rate into an even higher bracket)
2 people filing jointly where one person makes a lot and the other person makes much less = the lower income brings the larger income down to a smaller tax bracket.
(I’m an accountant (an auditor not a tax accountant) but this is my knowledge from what I’ve learned in school and from experience).