How should newlyweds go about filing taxes?

Question

We are a newlywed couple who are both starting new jobs. This is actually a two part question, pertaining to taxes.

1) To you married answerers out there, is it usually better to file jointly or single? What are some of the advantages/disadvantages, and what should we consider before making a decision.

2) When it comes to a new job and filling out the W-4 Tax Form, what are some of the options usually selected if planning to file jointly?

Thank you all in advance for your answers and any information that you include with your answer.

Answer 1

1. Your only options are Married Filing Jointly or Married Filing Separately. In nearly all cases you will pay less tax by filing jointly. You CANNOT file Single if you are married.

2. If you both claim Married and 1 on your W-4s, there's a pretty good chance that you'll be under withheld at the end of the year and have a bill to pay on Tax Day. This is especially true if one of you earns significantly more than the other does.

The safest way to proceed is to sit down together with a copy of Form W-4 and fill out the worksheets on page 2. There's one for deductions and one for multiple income sources. The total number of exemptions you arrive at is the total that you should claim between you. So if you come up with 1, then one of you claims 1 and the other claims 0. Normally the one with the higher income would claim 1 and the other would claim 0.

3. If you decide to file Separately, your only safe option on W-4 withholding is Married but Withhold at the Higher Single Rate and 0.

Answer 2

If you recently married... in 07', you'll want to check out some of the tax filing software available. Generally its more of an advantage to file jointly. With the tax software you'll be able to do a comparison by completing a tax form jointly and individually. When you compare your results you'll have your answer.

As far as your W-4, I've usually claimed no dependents, but my wife claimed two or three. This is a tricky one because if you don't claim any you may have a large refund at the end of the year, but it's like giving the government an interest free loan. Most people look at a big refund as if they are getting something for nothing from the Fed's. It's your money. Do you want it throughout the year or as a form of forced savings come tax time?

Should you have investments and such, you will want to consult an accountant should you need to claim any capital gains and interest... etc.

Good luck... and congratulations on your marriage.

Bill

Answer 3

Usually, it is better to file jointly than separately. You get more benefits of the deductions and credits that way. If one of you makes a really high income and the other little, it may be helpful to file separately then.

On the W-4, one of you should claim 0 exemptions, the other only 1 or 2. That should get you pretty close to your actual tax liability, and you can always adjust it at any time if it looks like you will owe a lot or get a large refund.

Answer 4

you'll pay less tax overall by filing 'married filing jointly'
Jo thinks that is about all there is to consider

your only other option is to file 'married filing separately'

on W4 you can claim 1 dependent each or one with one,. the other zero,, sort of depends on if you want a big refund at the end of year.

it's just taxes, don't try to over think this or make it into something it's not

Answer 5

I am married and me and my husband both claimed zero exemptions on our w4 which resulted in more taxes taken out of our checks. we just recently updated our w4 to married with zero dependants and we receive about $40 more bucks every pay check. we choose to do this because my husband who made about $45,000 last year and had about $6000 taken in taxes would have only received a refund of no more than $2000 doing his taxes on his own (single). i felt that if you were only getting back that amount after the irs taking so much taxes from your checks then it was worth receiving the extra money every pay period. we ended up filing jointly and we have a daughter so that brought our refund up to about $5 or 6K but i believe that if you dont have dependants to claim when you file your return you should just stick to claiming married with zero dependants on your w4 so you can get the extra money every check instead of discovering that you will receive a petty check tax season.

Answer 6

Software programs like Turbo Tax will run
your figures both ways to see what benefits
you most.
There is no charge unless you print and
file.

Answer 7

Ask a CPA!