Marriage Tax

Has any other newlywed here been affected by the marriage tax?

I can't believe it - Every year I usually get a refund of about $900 and was expecting the same this year as my income has not changed and I was eligable for some educational tax breaks due to being a graduat student.

My husband and I did our taxes this weekend - first we tried doing it seperately and he ended up oweing $1000 and I ended up oweing $50 and I couldn't take advantage of the tax breaks because we weren't filing jointly.

Then we did jointly and ended up owing $400

Its better than $1000 I know, but I can't believe how we are being penalized because we got married. Any advice on how to deal with this or what to do to avoid this situation in future tax years?

Re: Marriage Tax

Me & DH were very annoyed when we found out
that we owed money.We usually both get back money but because we are married now,we owe!
I don't know how to resolve it but next year we are going to a different accountant!

Re: Marriage Tax

thankfully, I didn't wind up oweing, but we only got back half of what we've had the years before.

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I am not sure how to get around this either. I know DH takes additional money out of his check every week because he works 2 jobs. In additional we both are 0- with hold at higher single rate on our W-2s (this is what my accountant suggested to me).... did you change your w2s at work? Maybe you aren't taking out enough...?

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I also claimed 0 and I have extra money pulled out of my paychecks but we owed!

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We didn't get back as much as we did when we were single, but I'm surprised we don't owe, since we don't have dependents and don't own property.

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Did you claim 0 as married or 0 at higher single rate- I think there are 2 different options.
& I think it also depends on how much $ you make (what tax bracket you are in). DH & I are poor- so we don't really get penalized.

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We owed the state but got a refund from the IRS but it was much smaller then last year.

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We also got screwed by this. Last year we got back money but that's b/c I was paying estimated taxes at the time and overpaid.

This year we really got slammed. I claim O on my W-2 and my husband claims 1. From now on he'll claim 0 too and we'll have extra money taken out.

We owed over $3600!! We are getting money back from state but not much. (We live in NC)

Re: Marriage Tax

If both spouse work full time and are making good money, you are rpobably being pushed into a higher tax bracket then you are getting withheld at. If you make 50,000 and they withhold at say 20%, for each of you and then when you add the two together 100,000, you might be in the 25% tax bracket. I would increase your withholding by maybe $25 each week, or take the amount you owed at the end of the year and then divide by the amount of weeks left.

You should not really be getting a refund, it does not make sense econimically, the gov't ius holding your money with out paying you interest on it, it is better to have money diffectly pulled from your check and put into a savings account.

Re: Marriage Tax

I dont know how it happened but we got back alot more than usual.

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shelzp: You are absolutely right and that's exactly what happened to us. We are going to have that extra money pulled out this year. We'll just have to make up for the past few months by having a few more dollars taken out for the remainder of the year.

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Lets just say there goes our patio furniture plus my build in china cabinet. And I owned a co-op! We will do much better next year because of the house.

Re: Marriage Tax

does anyone know if owning a house will negate the marriage tax? My fi and I just changed our withholding from 0 to 1 b/c of the new house and now I'm afriad this might screw us! (I got back a little over $4k this year and I'm counting on that for next year!!!)

Re: Marriage Tax

Owning a house will definately change the amount of tax that you pay. The interest and tax deductions for the house will decrease your gross income. Depending on what you earn this may or may not negate the marriage penalty. I think changing your deduction to 1 was the right thing to do.

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We bought a coop in Nov. and b/c we pay maintenance fees/mortgage, we got a nice return which negated the marriage tax. I guess owning something is a way around it.

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we owed $1K - between the marriage tax, similiar salaries, and my severance package pushing us into a higher tax bracket, it was a bad year for taxes.

Re: Marriage Tax

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We dropped our taxes off on Saturday. She didn't look too optomistic when I said does it look like we would get anything back. She is going to run them both separately and joint. What a pain. We need to buy something so we have a write off.

Re: Marriage Tax

Paying Mortgage interest and Real estate taxes helps, but it has to be above the standard deduction. If you are worried about your witholding you should speak to a CPA about it. They can performa projection for you so that you can have the proper witholding during the year, so you are not stuck with a big tax bill coem April 15th.