Is Single 1 tax status the same as being married, but withhold at a higher single rate?

Question

I got married in Sept. 2006. My payroll changed my tax status to Married 1. I ended up owing the IRS in April, 2007. (My husband never changed his status from Single 1.) My accountant suggested that I file as Married, but withhold at a higher single rate. After a pay period or two, I noticed that my payroll dept. did not do this. They claimed that their paychex system does not have a check box for that option. They switched my status to Single 1. I feel that not only is too much money being withheld from my paycheck, but also, can't I get into trouble for filing as a Single 1 when I am married? Does anyone have any recommendations for how my husband and I should file? (Our accountant last year did a Married, filing separately return. My status was Married, 1 at the time. My husband was Single 1.)
Thanks.

Answer 1

"Married but withhold at the higher single rate" and "Single" are the same as far as withholding are concerned. There's nothing wrong with your withholding being done that way. It would only be a problem if you were to file a tax return as "Single". How you complete Form W-4 with your employer and how you file your tax return are separate and distinct issues. Don't confuse the two!

What I would be more curious about is why your accountant filed your returns as Married Filing Separately. You'll normally pay more tax that way. Married Filing Jointly is how you would normally want to file as you'll pay less total tax that way unless you have a very unusual tax situation.

Answer 2

For W-4 purposes, the "single 1" would be the same as "married 1 but withhold at higher single rate" - and you won't get in trouble as long as you file your actual tax return as married.

Was there some reason why your accountant did your returns last year as married filing separately? You almost always save total tax for the two of you if you file a joint return - depending on circumstances, it might be a little, might be a lot.

Answer 3

You need to ask why your accountant file a MFS return. That is normally not the most advantageous way for a married couple to file. There are a few circumstances in which MFS is advisable but they are rare. As for your withholding, basically you can put any status you want on the W-4 withholding form as long as you don't come up short at tax time. The withholding categories are nothing more than a system to guesses how much withholding you will need to cover your tax liability.

Answer 4

If you were married on the last date of year 2006, then your status cannot be Single. It can be Married Filing Jointly or Married Filing Separately. Your husband should not file as Single.
Here is a tip from IRS publication:
"If you and your spouse each have income, you may want to figure your tax both on a joint return and on separate returns (using the filing status of married filing separately). Choose the method that gives the two of you the lower combined tax."