We live in NYC and each make about $65-70 a year. We have each been in the 30% bracket roughly. I have some friends who have been just raped by taxes after getting married. One couple we know were bumped up to the point that they are making less money after getting married. We do not have kids, and don't plan to, also we don't own, but do plan to buy in the next two years. We are going to have a chat with our accountant at tax time, but I'm antsy. Please share your expertise or expereinces.
2007-12-23 13:32:33 · 4 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
You will break even. If you are married and have a joint income of $135,000 (That's $65,000 + $70,000) and claim standard deduction, your federal tax liability will be $22,222. If each of you have half of that and are single, your federal tax liability will be $11,111 each. I don't know what you will owe for state and city taxes and any charitable contributions, that might put you in itemizing range. Figure your actual amounts using the linked form. I heartily recommend using a pencil, not a pen.
2007-12-23 14:31:04 · answer #1 · answered by Anonymous · 0⤊ 0⤋
If your incomes are similar it's probably a wash either way. The so-called "marriage penalty" has largely been erased unless you are low income folks with your own children and lose out on the EIC by getting married or if you are receiving Social Security and have fairly high other income.
Your Federal marginal rates are probalby no more than 25% and at your income levels the net rate is probably less than 20%.
The standard deduction for a married couple is exaclty double what it would be for 2 Single filers. And the tax rate tables roll to the next higher level at double the income levels of Single filers as well so your total tax bill should be within a few dollars of what you are currently paying.
The tax liability on a joint return LOOKS high, but if you run 2 dummy calculations as Single and one as Married Filing Jointly you will almost certainly see that the total tax liability is the same either way.
2007-12-23 15:38:31 · answer #2 · answered by Bostonian In MO 7 · 0⤊ 0⤋
If taxes keep you two from not being married then why bother with it. Have your accountant do your taxes as if you were married then do your taxes as if you were not married. Then you will see the difference. There is no 30% bracket. There are six tax brackets: 10%, 15%, 25%, 28%, 33% and 35%.
As far as your friends are concerned: You do not know all of their financial details that affects their taxes. There could be many factors that they had fail to mentioned. For most people, "Married Filing Jointly" is the best filing status to use rather than filing single.
2007-12-23 23:36:44 · answer #3 · answered by Gary 5 · 0⤊ 1⤋
The only real way to tell is to crunch the numbers for your particular circumstances.
In the past 10 years a number of steps have been taken to reduce the marriage penalty. Additionally, although it received very little press many couples had a marriage bonus.
2007-12-23 14:05:02 · answer #4 · answered by taxreff 7 · 0⤊ 0⤋