Post # 1
I’m thinking ahead of myself 🙂
For those of you who are married and have filed jointly, how exactloy does the return work? My fiance and I have been living together for a while, and split all of our shared bills equally. We have separate cell bills (still under our families’ plans), insurance, etc. I am still in grad school, and part of my PhD stipend includes medical insurance, so I’m going to take that for as long as they can offer it, to save us money. In light of our functioning system, we’ve decided post marraige, we are going to equally contribute to a joint savings account, but still keep our own checking and savings accounts, and split the bills as before. Once we have kids, it’ll likely change, but we figure if it works, let’s stick with it.
How do taxes work? I have no problem filing jointly, but wonder how the tax return works. Because I am a student and receive a stipend, tax time is always a great time for me, and I always get a big refund. I always rely on that money and treat it as income. He has a good job with a normal salary, and his tax return is usually 1/3 as mine. When you file jointly, do you literally combine everything and treat it as one income, so that your return is a single check? Or does the IRS tell you how much each spouse is owed, based on their incomes?
Just so we can plan 🙂
Post # 2
It will all be combined and you will receive a single check. Because you are married, you will likely receive a larger check!
Post # 3
You could still file seperately, even once you’re married if you so chose. However like soon2bmrs said, typically once married you will likely get a larger refund.
Post # 4
We’re going to do married but filing separately. For student loan repayment purposes, if you’re on the income based repayment plan, they only consider your income if you file separately. If you file joint, they take both incomes into account and for me, that’s not a good thing lol!
Post # 5
musket87: Our first year married my tax guy calculated our return twice – once jointly and once married filing separately – and then we actually filed jointly since it worked out to a bigger refund for us. The annoying this is we actually paid less in overall taxes when we were individuals just living together because of our deductions, etc. so we get hit with a slight marriage penalty (about $700).
Post # 6
WAIT WAIT WAIT. Marriage doesn’t always yield a larger refund. (Google “marriage tax penalty” for more information.”
And your situation is particularly complicated, since you don’t receive normal income, but instead receive a graduate stipend. You need to check the following things:
1. Whether getting legally married will change your stipend at all. (Some universities consider part of your funding to be “financial aid” and if you have a spouse who makes income, they might decrease that financial aid.)
2. Then once you know how much “income” you actually get, figure out what credits, etc. you’re using when you file, and whether you’ll lose any or gain any by getting married. And figure out what tax bracket your combined income puts you in.
Getting married WILL change your tax burden. (I think you’re thinking it won’t, and you’re just wondering if there’ll be one check or two.) And you should never rely on a tax refund. I used to file people’s taxes for them, and so mamy people told me, “I always get $x, I rely on it!” But credits get phased out, education benefits change, etc.
Post # 7
Also it looks like you’re getting marred in November 2016. Just so you know, the IRS treats you as married or not depending on how you are on December 31. Thus, all of 2016’s income will be taxed at your married level when you file in early 2017.
This can really screw people up, because they assume that the married thing doesn’t kick in until their wedding date. You’re right to be thinking about this now.
Post # 8
We calculated our return both ways: married and seperate, and married and joint. It was better for us to file seperately, by a long shot actually, and actually being married (while even filing separately) gave us the worst return than our single years, unfortunately. It is fairly annoying, actually.
We went thru a tax accountant to figure this all out, but there are programs out there where you can plug in your information, and ‘see’ which way works out better. I know for us it was one of those ‘being married sucks’ moments, lol – as far as ‘benefits’ go.
Post # 9
musket87: Benig married adds a whole new level of adventure to your taxes! If you use a tax program you can usually check whether filing jointly of seperately will benefit you guys more. If you find the filing seperately is best for you, you’ll recieve seperate checks, so it’ll be easy to keep those seperate. If you file jointly you’ll recieve one check so you and your Darling Husband will have to decide what to do with it. Here are some options:
1) Split it 50/50
2) Split it in a different percentage, based on what you guys each would have got back if you’d filed as single/married seperately. For example, if based on filing seperately you would have got $3000 back and your Darling Husband would have got $1000 back, then split the joint refud check 75%/25%.
3) Put it straight into your joint savings account (that means adjusting your budget to no longer count on it for income).
4) Use it for a joint expense such as a vacation.
I personally chose to completely combine finances with my Darling Husband and I am glad we’ve done so. For us, it just makes things simpler.
Post # 10
While you’re talking about taxes, you should consider adjusting your withholdings so you don’t get a big refund and don’t owe a lot but get to keep more of your paycheck each month. It may feel fun to get a big tax refund but really that is just the government giving you your own money back after they’ve had it from 3-13 months. And since they don’t pay you a penny of interest on that money, you’re basically taking money out of your own pocket every month you let them hold onto your excess tax payments.
Post # 11
LilliV: We are also penalized for being married. It happens with above average earners when both are in similar tax brackets. We’ve actually considered a divorce because of it, but it screws up my right to his pension.
Post # 12
GrannyPantiesRock: thankfully ours isn’t enough of a penalty to have to go that far! Besides if one of us stays home with kids in the future it will flip into a marriage benefit so hopefully it all evens out in the end.
Post # 13
LilliV: GrannyPantiesRock: yeah, we have the marriage penalty too. We thought about permanent engagement because of the tax burden. since we live in a community property state, we went ahead and got married for company benefits, medical decisions and estate tax issues.