Jointly Filing Taxes After Getting Married Tips

What would the tax effects be of someone getting married when the husband has an income of 48k annually and hers is 29k. The children are 6 and 8. This basically comes down to the age old questions of should married people file jointly?

 

Should Married People File Jointly?

First off, She probably gets a good refund because she is eligible for the Earned Income Credit and the Child Tax Credit, and her two other standard deductions. You most likely did not receive a refund most years because you were single, and you claimed only one deduction on your W-4 form.

But since you have been married you and lived together the for more than half the year, you have to file Married Filing Jointly or Married Filing Separately. The thing is, Married Filing Jointly takes both of your incomes, adds them together, and allows you to take the deductions for you, her, and the two kids. You will also get the Child Tax Credit.

 

Changing W-4 After Marrying

So as long as you don’t change your W-4 from 1 or 0 and she leaves her the same, the only thing you’re losing is, the Earned Income Credit – which was approximately an extra $2,522-$2,733 added onto her refund or taking away her tax liability. The Earned Income Credit Maxes out at approximately 51k Income so you will not get it. But on the bright side, your standard deduction is going to go up, and so will hers (but since it’s the same one, there you go).

Jointly Filing Taxes After Getting Married Tips

Assuming you have no adjustments to income other than just Normal Wages, then you’ve got 77k as your AGI (Adjusted Gross Income) that means that’s the number which your standard deduction (for MFJ is 12,200) and personal exemptions (3,900 * 4 <– one for each of the new family of 4, = $15,600) subtract from. So your Taxable income is $49,200 – Now luckily because that will fill into the 15% tax bracket (which means it’s a lowering of your normal tax rate) so your tax on that amount is $7,380. Then you get the two Child Tax Credits which lower your tax liability (1,000 * 2 for the kids=$2,000) so your actual tax liability for the year is $5,380. if you’ve been claiming 1 on your w-4 and haven’t changed it since you got married that means you’ve been taxed on the 25% tax rate. or you’ve withheld had about $9,500 withheld if she claimed Head of Household and 3 on her w-4 that means she has paid only $835. So your total taxes paid was $9500+835 = $10,335 and your refund will be around $4,955 for the federal return.

Mind you I’ve made a lot of assumptions here based on your information and assumptions about your Manipulation of the W-4 form (the form you fill out when you get a job). I also did not talk about state tax, because I don’t know Oklahoma state tax law very well. So please don’t take this as gospel truth here.

 

Married filing  Separately is Generally Not a Good Choice

1.) You are taxed at a higher rate (the single rate at first, then a steeper rate as your income goes up)

2.) You lose all of the benefits that you’re trying to keep. – Specifically in your case the Earned Income Tax Credit is not allowed with MFS, also many state credits also go away with MFS.

Sources:

Standard Deductions pdf

2012 Earned Income Tax Credit Chart