Newly married in Michigan... trying to figure out most beneficial paycheck withholdings and filing status.?

Question

Darling hubby and I live in Michigan. We are trying to figure out the most beneficial way to file our taxes so that we get the maximum return. Also we would like to start withholding less from our paycheck. Hubby has the health insurance & dental as well as our 401K deducted from his pay. I have none of the above. He actually makes less per hour but gets overtime and I only put in 38.5hrs/wk because my employer does not want to pay for health insurance. I also have a second job that doesn't exceed the 1000.00/yr limit. What is the best way to set up our withholdings so we get the maximum amt in our paycheck without jeapordizing our return? And what is the best way to file... married/jointly (for state) or just married (for state)?
Thanks!! :o)

Answer 1

For federal, the less you have deducted, the less you'll get in your refund, since your refund is just giving you back whatever amount you had withheld that was above what you actually owe. If you don't own a house or have children, you'd be wise to file as married/zero if you want a refund. I'm not sure what $1000 a year limit you are talking about for your second job - that's taxed from the first dollar, there isn't a $1000 a year limit on anything. Because of that second job, if you file married/zero you could end up owing tax. If you both file married/zero, they won't take out a lot more than if you file married/one, and you'll be a lot more likely to get a refund. If you aren't concerned about a refund and don't mind taking a chance on owing a little, you can both file married/one.