Post # 1
Mr Penguin and I got married a month ago, and I’m just starting to update my name everywhere, including SSA and at work. I think we both need to fill out updated W4’s to change our status to married. In the past, I have filed as single, 1 allowance, but he has filed single, 3 allowances. I get a bigger return after I file my taxes, and he gets a little less back. DH also has a second income from a small business he owns, so some of it washes out with business taxes. Our incomes are about even, but with his business, he probably earns a little more than I do.
We started to fill out the IRS worksheet to calculate what our withholding should be and it has us owing thousands of dollars!! I feel like we filled it out incorrectly, but at the same time I don’t want to owe a ton next April when we got to file our taxes. Has this happened to anyone else? I thought getting married meant tax breaks, but the numbers I’m seeing show that it’s working against us.
Should we withhold extra from our paychecks for the rest of this year to make up the difference? Should we change our W4’s at all? I feel like I should change my name at the very least, but maybe leave the allowances the same?
Post # 2
We pay more as a married couple than we did single because we both are relatively high earners. I would talk to your CPA before changing deductions, but if you both make over 6 figures then your calculations are probably close to accurate.
Post # 3
Husband and I both claim single 0 so we know we will get money back. But yes, you might want to consult someone to see what’s best.
Post # 4
Marriage doesn’t always mean tax breaks. I actually know a couple who choose not to get legally married precisely because their tax liability dramatically increases based on how it all works out with their particular financial situation. In some cases, you do pay more.
I would talk to a certified tax preparer or accountant just to make sure you fully understand all the implications and then decide from there. In the meantime, with not much left to the year, you can withhold a little bit more for the rest of the year and worst case scenario is you get more back if you’re wrong. I generally change my withholdings over the year depending on my circumstances (mostly how much OT I work or not in a given year) to keep my refund as close to zero without owing as possible. I’m not keen on giving interest-free loans and I’d rather save the “refund” money as I go along in my retirement account where it can actually earn something.
Post # 5
Yeah, sadly I’ll owe more taxes once I’m married. Right now I’m a grad student and earn very little, so I’m in the 15% tax bracket. Fiance is at the 25% tax bracket, and our combined income will remain in the 25% tax bracket.
Post # 6
Generally speaking marriage only means a reduction in taxes in single income households. I would NOT change to married on your W4. Depending on the numbers I would either leave it as is or raise your withholdings (lower your allowances).
This chart https://www.forbes.com/sites/kellyphillipserb/2016/10/25/irs-announces-2017-tax-rates-standard-deductions-exemption-amounts-and-more/#a15a48457017 can tell you if you are in a higher tax bracket. The one directly from the IRS is unduly complex, but this one is accurate.
Post # 7
If your salaries are fairly equal, you’ll generally pay more in taxes when you get married. Consult with a good CPA to make sure you’re getting all the deductions to which you are entitled.
Post # 8
since you make similar income, it is probably putting you in a higher tax bracket. if one made signficantly less than the other, that would have brought you down a little in tax brackets.
Post # 9
the marriage benefit was designed for a single earner and a stay-at-home spouse. My husband and I have a tax penalty too (but being able to be on his employer’s much cheaper health plan evens it out). We haven’t been able to get it right yet even though we thought we made the proper adjustments last year (and ended up owing over $3k. Oops. Oh well I would always rather owe than get a refund.). I’m not much help but I can commiserate!
Post # 10
Getting married is going to cost us tens of thousands more in taxes every year. The marriage tax penalty blows.
Post # 11
My husband and I use to get a little bit back or break even filing single and claiming 1. Our first year married, we filed our W-4s as married, claiming 1. We owed right around $2k for both federal and state. We now have our W-4s filled out as married, claiming 0, and I get extra money taken out each paycheck. Doing this, last year, we got back $20 from state and maybe $200 for the federal government.
PP are right. The break is for one income families. Being married, your joint income probably bumped you up to the next bracket, even though individually, you were in a lower tax bracket. There’s more to it than that, but you should talk to an accountant vs people on the internet for more details.
Post # 12
We both claim married, 0 allowances and we would barely get anything back.
If you’re claiming that many allowances you’re definitely going to owe, in my non-expert opinion.
If anything getting married makes you pay more in taxes.
Post # 13
My husband and I earn about the same and we found that we needed to evaluate what we want to have withheld. We discussed with our CPA after having several years with no return or owing money and we realized my husband was claiming 2 for no real reason. We had no kids and didn’t own property at the time, it was screwing us at tax time. We are currently married filing jointly and with 0 deductions and being taxed at the higher single rate. We will reevaluate after we file this tax season and we may adjust but we figued take the max now after so many frustrating years of tax filings.
Post # 14
Thanks everyone! I’m glad others can commiserate, but it also helps to know we’re not doing something incorrectly. Would you still change your W4 mid-year to at least show married? Or just leave this until January and start again next year as married?
Post # 15
For many dual income earners getting married means you owe more tax, not less.
DH and I finally figured out that not only do we both have to claim zero, but we also need to have extra withheld in order to avoid owing a lot in Apirl. It’s not that uncommon.
If you work with a tax preparer get him or her to help you figure it out. If not, trust your math and withhold as the worksheet indicated.