Shouldn't getting Married helped my taxes?

[dullard]

Originally posted by: TheTony
I assume this is married filing jointly? Just curious.

Yes, I used married filing jointly in that post.

 

[coomarlin]

Well I reran the numbers for all scenerios. And the bottom line is that getting married has definately been a tax penalty in our case. Writing the federal return off as a wash my state return works out like this:

Married Filing Jointly
- $326 owed to state

Married Filing Seperately
mine = -$290 owed to state
wifes = -$83 owed to state
combined -$373 owed to state

If we weren't married and filed single
mine = -$20 owed to state
hers = +$172 owed to her from state
combined +$152

So obviously we'll file jointly and pay the $326. and combined with losing out on the $152 we'll have a net loss of $478. So in short, we did get penalized for getting married. It doesn't change anything and like I said, the $78 won't kill us. Just kinda the thought of it bugs me a bit. Could've paid for that PS3 we've been considering getting Or even better we could've used it on our cruise thats coming up soon.

 

[compman25]

What state do you live in? Just curious.

 

[Mxylplyx]

Originally posted by: coomarlin

Originally posted by: Mxylplyx
Measuring your tax burden by the amount of your tax return is a simpleton way of going about it. Your taxes have gone down after getting married, and your tax withholdings likely went down as well if you changed your W-4 status to married. If your that beat up about it, both of you file single and 0, then you can both feel warm and fuzzy come tax time when the government returns your large interest free loan to them.

You don't need to be a sarcastic smartass about it. I never said I wanted some big fata$$ check. I personally wouldn't care as long as I break even.

We just got married in November and after changing my W4 status to married my salary paycheck did not decrease or increase one bit.

My issue was that my federal taxes did not change based on getting married but my state taxes changed quite drastically in my opinion. we went from a $1300 fed return to a $1275 return and that measily $25 difference is probably attributed to a slight increase in earned interest. But our state return went from +200 to -360 which I thought was odd. Sue me..............

You might not get "Beat Up" about taking a $500 state hit but I wasn't expecting it. Especially condsidering we broke even with the fed return. If you read my initial post I said that $500 was not a life changing amount and it will not break my bank. Was just looking for some clues as to why we lost $500 just for getting married.

If your federal withholdings didnt go down after changing your status to married, you need to have a word with your accounting department. Download the irs withholding tables and see if they are withholding the correct amount. I believe congress fixed the marriage penalty. The standard deduction for a married couple is now exactly twice that of a single deduction, so that shouldnt be the issue.

 

[jatwell]

Just FYI, I did end up having a penalty last year for getting married.

My wife owned a townhome and was able to itemize on her taxes. I have absolutely nothing I could itemize, so I was MUCH better off taking the standard deduction.

Since we were married, if one person itemizes, then you both have to itemize (I'm pretty sure on this) no matter if you file jointly or separately. Because of this, I got a lot less of a refund than I would have if she had itemized and I had filed with the standard deduction.

We were only married for two months, so kinda got screwed there.

 

[Starbuck1975]

I made this same mistake last year. Both my wife and I changed our withholdings from single to married, so the govt took out less taxes each paycheck...we also jumped a tax bracket last year.

So in our case, we got hit with the marriage penalty big time...2006, we got a modest refund from the government...for 2007, we owe a total of around 7k to state and federal.

We changed our withholdings back to "withhold at the higher single rate" so we don't get hammered again this year.

 

[coomarlin]

Thanks for all the tips guys.

BTW, I live in West Virginia. We got married in November so there was really only 6-7 weeks worth of 2007 income included at the marriage withholding rate (If it did indeed change which I don't think it did). I make a set salary and my paycheck stays the same throughout the year barring any raises or enhancements. However I did increase my life insurance policy after we got married and my paycheck decreased just a bit due to the inscreased amount taken out for the insurance. It appeared to jive with the price quote given to me by my HR person.

I guess next year will be the most telling year since we'll have an entire year of marriage to see how it effects taxes.

Anyway, thanks again for the suggestions.

 

[Fern]

Originally posted by: coomarlin
We just got married in November and after changing my W4 status to married my salary paycheck did not decrease or increase one bit.

That's not possible.

Either your paycheck did change, the payroll dept didn't record the change, or you went through one helluva calc to adjust for increased withholding to balance it out.

The marriage penalty was fixed several years ago. Generally, two people filing single will pay the exact same tax when they redo the return to combine their income/deductions into one MFJ return.

Th usual problem is that workers (husband and wife) redo their W4s to show MFJ.

Since the payroll w/h charts issued by the IRS automatically assume that only ONE spouse works, both people get credited for increased personal exemptions (the other spouse) and both get credit for the full amount of the increased standard deduction. I.e., every deduction is given twice, when you actual file you only get them once.

Fern

 

[shopbruin]

Originally posted by: Fern

Th usual problem is that workers (husband and wife) redo their W4s to show MFJ.

Since the payroll w/h charts issued by the IRS automatically assume that only ONE spouse works, both people get credited for increased personal exemptions (the other spouse) and both get credit for the full amount of the increased standard deduction. I.e., every deduction is given twice, when you actual file you only get them once.

Fern

I'm getting married this year. So I should keep my withholdings at whatever I have now to keep the possible tax hit down? And he should be single withholding 1 or 2 (maybe 2) when he starts working later in the year?

 

[altonb1]

Originally posted by: coomarlin
I'm going to do a comparision of last years taxes with this years. Like I said though, our incomes haven't changed at all and neither of us changed our withholding. So I expect the ratio of income to withholding to be pretty much the same bewteen 2006 and 2007.

The tax laws change yearly. More than likely, the tax rates changed and your employer(s) changed the amount of tax withheld. Also, there is an option on your w-4 for exemptions INCLUDING an option to withhold at a single rate instead of the married rate.

Overall, it isn't the amount of the refund--it's the total amount of taxes paid that you need to compare.

 

[Fern]

Originally posted by: freesia39

Originally posted by: Fern

Th usual problem is that workers (husband and wife) redo their W4s to show MFJ.

Since the payroll w/h charts issued by the IRS automatically assume that only ONE spouse works, both people get credited for increased personal exemptions (the other spouse) and both get credit for the full amount of the increased standard deduction. I.e., every deduction is given twice, when you actual file you only get them once.

Fern

I'm getting married this year. So I should keep my withholdings at whatever I have now to keep the possible tax hit down? And he should be single withholding 1 or 2 (maybe 2) when he starts working later in the year?

Yeah,

If you change your W4 to MFJ your withholding will drop. Best to keep it at "single". He should use "single" too.

There is no "tax hit" when you get married. Again, the problem is that when you switch to MFJ status on your W4, the w/h tables assume that your spouse is unemployed. By doing so, it gives an extra exemption (under the assumption your spouse won't need it) and doubles the amount given as deductions (standard deductions doubles from single>MFJ).

Hope that helps explain better

Fern

 

[batmang]

Originally posted by: coomarlin
Not huge life changing amounts but annoying none the less.

Last year between me and my girlfriend as an unmarried couple we received about $1500 in fed and state tax returns. ($1300 federal and $200 state).

This year as a married couple filing jointly we will receive $1275 from the feds but we apparently owe the state $360! WTF? Our jobs haven't changed and our income is basically the same. So instead of netting $1500 we will only net about $915

We have a very simple return as we don't have any kids and do not own a home yet. We take a standard deduction and don't itemize.

I always thought getting married helped your taxes?

Did you guys have any interest from school loans last year, and NOT this year? That makes a difference.

 

[shopbruin]

Originally posted by: Fern

Originally posted by: freesia39

Originally posted by: Fern

Th usual problem is that workers (husband and wife) redo their W4s to show MFJ.

Since the payroll w/h charts issued by the IRS automatically assume that only ONE spouse works, both people get credited for increased personal exemptions (the other spouse) and both get credit for the full amount of the increased standard deduction. I.e., every deduction is given twice, when you actual file you only get them once.

Fern

I'm getting married this year. So I should keep my withholdings at whatever I have now to keep the possible tax hit down? And he should be single withholding 1 or 2 (maybe 2) when he starts working later in the year?

Yeah,

If you change your W4 to MFJ your withholding will drop. Best to keep it at "single". He should use "single" too.

There is no "tax hit" when you get married. Again, the problem is that when you switch to MFJ status on your W4, the w/h tables assume that your spouse is unemployed. By doing so, it gives an extra exemption (under the assumption your spouse won't need it) and doubles the amount given as deductions (standard deductions doubles from single>MFJ).

Hope that helps explain better

Fern

Thanks, that makes sense.

 

[coomarlin]

Originally posted by: Fern

Originally posted by: freesia39

Originally posted by: Fern

Th usual problem is that workers (husband and wife) redo their W4s to show MFJ.

Since the payroll w/h charts issued by the IRS automatically assume that only ONE spouse works, both people get credited for increased personal exemptions (the other spouse) and both get credit for the full amount of the increased standard deduction. I.e., every deduction is given twice, when you actual file you only get them once.

Fern

I'm getting married this year. So I should keep my withholdings at whatever I have now to keep the possible tax hit down? And he should be single withholding 1 or 2 (maybe 2) when he starts working later in the year?

Yeah,

If you change your W4 to MFJ your withholding will drop. Best to keep it at "single". He should use "single" too.

There is no "tax hit" when you get married. Again, the problem is that when you switch to MFJ status on your W4, the w/h tables assume that your spouse is unemployed. By doing so, it gives an extra exemption (under the assumption your spouse won't need it) and doubles the amount given as deductions (standard deductions doubles from single>MFJ).

Hope that helps explain better

Fern

Thanks for the attempt at explaining things but now I'm just as confused as ever. I was only married 7 weeks in all of 2007.

I filled out the state tax as married and again filled it out as single. As I posted above we lost $478. If we could file single we'd get back $152. But since we have to file Married we owe $326.

How is that not a "tax hit".

We did not take a hit with our federal taxes. We got back roughly the same amount married as we would've if we had filed single. But the state is a totally different story.

 

[thebigdude]

What different types of income did you report this year.

Was it just income from W-2s or did you have other income?

 

[sciencewhiz]

Originally posted by: coomarlin
Thanks for the attempt at explaining things but now I'm just as confused as ever. I was only married 7 weeks in all of 2007.

I filled out the state tax as married and again filled it out as single. As I posted above we lost $478. If we could file single we'd get back $152. But since we have to file Married we owe $326.

How is that not a "tax hit".

We did not take a hit with our federal taxes. We got back roughly the same amount married as we would've if we had filed single. But the state is a totally different story.

You have not posted the info that DrPizza or Dullard asked for, therefore we can't help you.

 

[Fern]

Originally posted by: coomarlin

Originally posted by: Fern
-snip-

Thanks for the attempt at explaining things but now I'm just as confused as ever. I was only married 7 weeks in all of 2007.

I filled out the state tax as married and again filled it out as single. As I posted above we lost $478. If we could file single we'd get back $152. But since we have to file Married we owe $326.

How is that not a "tax hit".

We did not take a hit with our federal taxes. We got back roughly the same amount married as we would've if we had filed single. But the state is a totally different story.

My remarks were directed at the federal implications etc.

Look to your states tax brackets first.

E.G., for the federal baracket (I'm using 06 amounts, can't find my book for this year) the 10% bracket is as follows:

Single: $7,300
MFJ: $14,600

They just double all the brackets for MFJ so there is NO penalty for being married.

Looks like your state doesn't and that's likely the problem. I'll see if I can find info on your state. Looks like they still have a "marriage penalty". The Feds eliminated it several years ago.

Edit: Ouch! Looks like WV only has one tax table for use by Single, HoH and MFJ filers. If that's the case, yes you're getting a "penalty" for being married. You're combined income is therefore going to push you into higher brackets.

Fern

 

[Xavier434]

There are tons of details involved for each individual to draw conclusions for them self here, but it definitely would not help my SO and I if we got married. She is considered a single mom right now which would change if we got hitched. That alone would cut a chunk out of our return. We do the work every year to see what our returns would be if we happened to be married and the result is always less.

 

[coomarlin]

Originally posted by: Fern

Originally posted by: coomarlin

Originally posted by: Fern
-snip-

Thanks for the attempt at explaining things but now I'm just as confused as ever. I was only married 7 weeks in all of 2007.

I filled out the state tax as married and again filled it out as single. As I posted above we lost $478. If we could file single we'd get back $152. But since we have to file Married we owe $326.

How is that not a "tax hit".

We did not take a hit with our federal taxes. We got back roughly the same amount married as we would've if we had filed single. But the state is a totally different story.

My remarks were directed at the federal implications etc.

Look to your states tax brackets first.

E.G., for the federal baracket (I'm using 06 amounts, can't find my book for this year) the 10% bracket is as follows:

Single: $7,300
MFJ: $14,600

They just double all the brackets for MFJ so there is NO penalty for being married.

Looks like your state doesn't and that's likely the problem. I'll see if I can find info on your state. Looks like they still have a "marriage penalty". The Feds eliminated it several years ago.

Edit: Ouch! Looks like WV only has one tax table for use by Single, HoH and MFJ filers. If that's the case, yes you're getting a "penalty" for being married. You're combined income is therefore going to push you into higher brackets.

Fern

Thank you Fern. Finally something I understand. Now maybe the others here may understand my situation a little better. I was talking to my HR lady the other day and she thought that WV did away with a Marriage penalty back in the early 2000's obviously not. Like you said if there is only one tax table for Single, HOH, and MFJ then I'm gonna get screwed. This explains perfectly why I can do the returns indivdually as single and come out ahead. Just another reason that WV is in the bottom 5 of every economic statistic. It's such a pretty state but it's run very poorly.

Thanks again Fern for sheding light on my issue.

 

[wiredspider]

Originally posted by: Starbuck1975
I made this same mistake last year. Both my wife and I changed our withholdings from single to married, so the govt took out less taxes each paycheck...we also jumped a tax bracket last year.

So in our case, we got hit with the marriage penalty big time...2006, we got a modest refund from the government...for 2007, we owe a total of around 7k to state and federal.

We changed our withholdings back to "withhold at the higher single rate" so we don't get hammered again this year.

so you would rather the gov your money for free for an entire year instead of being able to earn interest and giving it back at the end?

 

[imported_Baloo]

Jeez, you get married, combining two incomes, your net earnings went up probably close to double, and you think it's a penalty cause you pay a couple hundred dollars more than you did last year, ignoring the fact that the standard deductin last year was higher than this year, so the real difference is less.


Wahhhh! Wahhhhh! Wahhhhh!

 

[coomarlin]

Originally posted by: Baloo
Jeez, you get married, combining two incomes, your net earnings went up probably close to double, and you think it's a penalty cause you pay a couple hundred dollars more than you did last year, ignoring the fact that the standard deductin last year was higher than this year, so the real difference is less.


Wahhhh! Wahhhhh! Wahhhhh!

You're a retard.

Did you even read the thread? Our net earnings did not double. They were the same as last years earnings. The only difference is that we got married. This has nothing to do with withholding rates or even our 2006 return. Fern just showed that WV does have a marriage penalty because they sue the same tax table for single and MFJ. IF we could file single for "2007" we'd get back $152. Instead we are forced to file MFJ and because of that we owe $326.

If a $478 loss is trivial to you then so be it. I think a marriage penalty sucks. You must be one of the 2-3 people in the country that enjoys paying taxes.