I accepted a much better paying job but I'm not bringing home that much more...what should I do?

Question

I accepted a much better paying job but I'm not bringing home that much more...what should I do?

I accepted a better paying job because my common law husband is unable to work due to medical issues. I'm actually only bringing home 600.00 more a month. What deductions should I have taken out of my check to get my tax rate down.

I am presently claiming 0 head of household. In previous years I claimed 1. I used to pay for half of my medical insurance. My present employer pays all of my our medical insurance. I'm not having money into retirement yet but my employer is putting money into my retirement. I just started having 150.00 a month into a medical flex plan. What else can I do to be taxed at a lower rate but not have to pay a bunch of taxes at the end of the year.

Answer 1

You say that he is your common law husband. If that is true, you are married for tax purposes and cannot file as Head of Household. You'll generally be better off filing a joint return with your husband; your ONLY other option is Married Filing Separately and that is seldom a good idea.

For your withholding since you are married, you should be filling out your W-4 as Married and claim at least 2 withholding allowances. Since your husband does not work you should be safe claiming as many as 3. That would maximize your take-home pay though there is a very slight risk of a SMALL tax bill at filing time; that would be less than $100 in nearly all cases.

Do make SURE that you use all of that money in the Flex plan during the year! Since you have committed to spend $1,800 per year, you do NOT have to wait until the money is in the plan to start spending it -- you could use the entire $1,800 immediately after the New Year if you needed to. However if you have anything left in it at the end of the plan year, that will be forfeit to your employer at the end of the year. They are NOT allowed to return the excess money to you or roll it over into the next plan year.