tax questions - marriage penalty?

99.9% of the time you should always file Married Filing Jointly. The only time when Married Filing Separately is beneficial is when one spouse makes significantly less (I'm talking 1/5 or 1/6 of the other spouse). Under those circumstances, sometimes it's better to file separately and allocate all your itemized deductions to the wage-earner spouse. Since the lower earning spouse is already in the lower tax bracket, you may be able to bring the wage-earner spouse into a lower tax bracket by giving him/her all the deductions. It's very rare that it works out better this way.

The best thing to do is to spend $20 and get Turbo Tax. It's by far the best product out there. It asks a million little questions that most people (incl. accountants) don't think to ask. I use it for my clients I do outside of Deloitte. If you watch the Staples/Office Max circular, you can sometimes get the software even cheaper after rebates. I think it's $20 for the federal and $40 for NYS. (TIP: Buy one copy and split the cost with friends - for some reason Turbo Tax allows you to download it a gazillion times).

Good Luck!!

Hi Lisa -

Deferring income is a little tricky. If you're a 'regular' employee who gets a W-2, there's not much you can do. What is on your W-2 is what gets reported. Sometimes its possible to have an employer defer a year-end bonus until after January 1 - but usually the company wants the liability off their books by year-end, so that's not too common.

If you're self-employed, you have a little more leeway in reporting your income. Essentially, you report income in the year that it's earned. If you're an outside consultant, for example, and somebody pays you in late-December for work to be done in 2003, you can defer that income until 2003.

***** One more super-important thing that just came to mind - make sure you file your tax return under the EXACT SAME NAME as your social security number. If you don't change your social security card to reflect your married name, make sure your tax return shows your maiden name - Jane Doe & John Smith, not Jane & John Smith. The IRS shares the same database as the Social Security department and will bounce back your return if the names don't match. Not a huge deal, but still a hassle (my grandmother got remarried so I filed her return Mr. & Mrs. Kusy - well, Grandma didn't change her name with SS, so her return got bounced back, too funny - 85 yr old being audited)

Another long post - sorry ladies!!!

Keep the questions coming!!

Karen,

Thanks for all the good info. I'm a CPA and could've answered some of these but you've been a real help. I guess I wouldn't call myself an expert since I still get my taxes done by someone else!!!

Keep the good info coming. I know lots of people have questions about taxes - especially after first getting married.

FYI - We also get killed by the Marriage Penalty.