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I've heard that you get all sorts of tax deductions for being married and you pay less taxes if you are married. Well, when I look at my fiance's income and mine, here is what I see....
Being single, he is in the 25% tax bracket and I am in the 28%. If we were married, we would be in the 28% bracket together with no possible way on God's green earth to have enough deductions to bring us down to 25%. So, I ask....what is the tax advantage to being married?
Thats a great question...and the simple answer is...there is not always an advantage to filing joint, thats why there is an option to file separate. To maximize your return, you really should run the numbers both ways to make sure the other is not better.
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I've heard that you get all sorts of tax deductions for being married and you pay less taxes if you are married. Well, when I look at my fiance's income and mine, here is what I see....
Being single, he is in the 25% tax bracket and I am in the 28%. If we were married, we would be in the 28% bracket together with no possible way on God's green earth to have enough deductions to bring us down to 25%. So, I ask....what is the tax advantage to being married?
Thanks.
Hopefully you are not basing your decision to marry or not to marry based on taxes.
From a financial perspective you will probably be better off, even if you are in a higher tax bracket. It is going to be tough to try and find tax deductions as a married couple, but with the combined income of two pilot salaries your problem is not necessarily a bad problem to have to deal with.
It's good to come here and solicit for opinions. However, the best advice that I will offer to you is to seek the counsel of very good CPA.
BTW, there may not be many tax advantages to being married, but there are countless advantages to being married that are priceless.
Thats a great question...and the simple answer is...there is not always an advantage to filing joint, thats why there is an option to file separate. To maximize your return, you really should run the numbers both ways to make sure the other is not better.
Well, even if we were married filing separately we would still be both in 28% vs. him 25% and myself 28%.
Hopefully you are not basing your decision to marry or not to marry based on taxes.
From a financial perspective you will probably be better off, even if you are in a higher tax bracket. It is going to be tough to try and find tax deductions as a married couple, but with the combined income of two pilot salaries your problem is not necessarily a bad problem to have to deal with.
It's good to come here and solicit for opinions. However, the best advice that I will offer to you is to seek the counsel of very good CPA.
BTW, there may not be many tax advantages to being married, but there are countless advantages to being married that are priceless.
Thanks Led but if it's going to cost me more money to be married, we may just be "domestic partners" for life.
(We are cheap Polish pilots....what do you expect....LOL!)
BTW, no, we are not basing the decision on that....I was just wondering what the financial advantage is since I have heard that but noone has told me what it is.
Tax tables for filing single are significantly higher than filing jointly. I ran the numbers both ways and I find filing jointly works best for me. One of the problems is dividing up the deductions properly so the person in the higher bracket can get a tax break. One might also be subject to AMT sooner when filing taxes as a single. A married couple can do it either way and it only takes a couple of minutes to run some prelim numbers using the single tax tables for both.
Tax tables for filing single are significantly higher than filing jointly. I ran the numbers both ways and I find filing jointly works best for me. One of the problems is dividing up the deductions properly so the person in the higher bracket can get a tax break. One might also be subject to AMT sooner when filing taxes as a single. A married couple can do it either way and it only takes a couple of minutes to run some prelim numbers using the single tax tables for both.
It must depend how much you make because this year, according to the tax tables, we are better off single than married filing jointly or married filing separately.
I've heard that you get all sorts of tax deductions for being married and you pay less taxes if you are married. Well, when I look at my fiance's income and mine, here is what I see....
Being single, he is in the 25% tax bracket and I am in the 28%. If we were married, we would be in the 28% bracket together with no possible way on God's green earth to have enough deductions to bring us down to 25%. So, I ask....what is the tax advantage to being married?
Thanks.
That's called the "marriage penalty" and is debated year after year in Congress, usually when the majority shifts from repub to dem or vice versa.
When you are married you pay approximately 10% more (on average for somewhere around median income) than if you guys were single.
It not only works for you, it's that way for all married couples where BOTH WORK. If one did not work, ie the "typical" 1950s married couple (man works wife stays home) then married filing jointly is a benefit. But if both have income, you are penalized vs being single.
I actually have a friend of mine who is a heart surgeon and wife is a neurologist---they actually got divorced one year and then remarried after Jan 1st to avoid the penalty (I guess it was enough for a down payment on their massive house they live in now).
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