Are we going to lose out on our tax return just because we got married?

Question

Last yr my tax return was around $4500 and my fiance's was about $3700 thanks to EIC. Now I'm finding that because we got married we cannot file separately if we want EIC. We have to combine our income and may be over the amount or if we qualify it will be for far less. Did we lose $5000 a year just by getting married? I thought married couples got a better tax return and larger deductions! I am getting very frustrated! Someone please help me! We have four children between us and really depend on our return to catch things up at the end of the year.

Answer 1

OK, let's clear up some terminology first. A "return" is the form you file with the IRS that lists your income, exemptions, deductions, credits, withholdings, etc.

You appear to be asking about the amount of your REFUND. Once you file a tax return, you MIGHT get a refund.

Now, to your situation. Yes, it's very possible that getting married may have cut you both out of the loop for the EITC. It's also very likely that you are getting short shrift on the standard deduction, assuming that you both qualified for Head of Household status.

If you each made in the region of $20,000 prior to your marriage you probably got a nice EITC payment in your refunds. However, your combined income after marriage is now near or above the upper limit for the EITC so you both lose it.

As to the standard deduction, if you both filed as HoH, your combined standard deduction was $15,100. As a married couple filing a joint return, your standard deduction drops to $10,300.

So, by getting married, your taxable income increases by nearly $5,000 and you lose thousands in EITC dollars.

Welcome to the "Marriage Tax Penalty", compliments of your government. "Paper" divorce, anyone?

Answer 2

I don't know much about your particular situation and I am not an expert at taxes. What I can tell you is that my husband and I are the perfect examples of the "marriage penalty". They supposedly made it so there was a better tax structure for when you got married, but lo and behold, this is definitely not always the case. For sure we would get more money back if we were single. This is the "marriage penalty" and Congress has been working on getting at least some of it rolled back. So in a nutshell, I can totally see that you'd now be out that $5000.

Answer 3

That is the marriage penalty at work. Unfortunately, filing married is never better than filing single except in the case of a single income family. If both spouses are working, it would always be better to file single (althought that isn't an option once you get married), since the two incomes are added together, but the income brackets, etc. are not double for married as compared to single. Of course, unfortunately, you have now seen this first hand.

Answer 4

Yes. I am sorry you were misled into thinking that there is no longer a marriage penalty in the United States. I actually know a couple who have lived together for many years who use their tax savings from remaining single and take a family vacation every year.

You might consider enlisting the help of a good CPA, but I think you are just out of luck. You will find you are doubly kicked when your children apply for financial aid for college.

Answer 5

You are correct. Filing as married separately you will lose almost all tax credits. For Earned Income Credit you cannot earn more than about $38000 jointly. The maximum EIC would be at income of about 13000 jointly and decline from there to zero at about the $38000. level.

Just a comment. It is almost NEVER to your advantage to file married and separate.

Answer 6

I suggest you go through all your options with a free online tax prep service company called taxact or other similar offers here http://www.redtagdeals.com/tax_preparation_online-coupons
and run through your taxes and check it out

There still is marriage penalty in some cases.

BTW - try coming out of EIC .. You could do better than that. Work hard and don;t depend on uncle sam's dole outs (you cannot really that way)

Answer 7

You wont lose it all. The way that it works is that you get less of a standard deduction than you would if you were single. expample: If you would get a $5000 standard deduction for being single, you might get $7500 total deduction as a married couple instead of the $10,000 total filing single un-married.

Answer 8

usually the amount of taxes you pay will decrease if you are filing jointly as a household. however, if you and your spouse now make over a certain bracket combined, you may have to pay more taxes.

Answer 9

MY HUBBY AND I GOT MARRIED LAST SEPTEMBER. I HAVE A FEELING WE WILL BE GETTING SCREWED TOO. IT'S BULL. MARRIED COUPLES SHOULDN'T BE PENALIZED FOR GETTING MARRIED. THERE SHOULD BE A CREDIT FOR GETTING MARRIED, AS MUCH AS IT COSTS JUST TO HAVE A WEDDING. NOW I WISH WE WOUDLN'T HAVE AND I TOTALLY REALIZE WHY PEOPLE DON'T GET MARRIED THESE DAYS, JUST HAVE KIDS AND LIVE TOGETHER.

Answer 10

if your income combined equals enough to disqualify you from the EIC, then that's just how it is....you shouldn't be taking money from the government that isn't yours...