Sort of Unexpected Wedding Cost...

Jells2dot0

Also, don't forget that when putting more money into a 401k to reduce your taxable income, you're actually capped at how much you can put in! DH and I are dangerously close to being maxed out. I think DH may have a little more leeway since he is allowed catch up contributions (50 years old+)

Taxes are one of the reasons we're not selling our AZ home when we buy in Texas. We'll be able to take advantage of a second home deduction. We've been phased out of any breaks with his rental property, so we'll probably sell that when the current renters move out.

jenna8984

@jells2dot0 I totally wish I could afford to come anywhere near the maximum contribution lol. I do 10% right now and I'm still WAY under the max.

NYCMercedes

We've paid the penalty for years. H says he's thankful we have the income.

Sugargirl1019

Thanks to this discussion , I'm now freaking out . Getting on this website now. But good lord some of you have to pay 10, 000???? Who has that money laying around for taxes?!

I have my withholdings at zero. DH effed up and first had his at like 99 so he could have the most money to pay back our debts. When I found out and freaked out, he (hopefully really) changed it back to zero withholdings. It was only like that for 3 months, and he's only been working since May (not a full year).

I've always gotten back beautiful tax refunds.. and was expecting to not get anything back this year. But owing? Now I'm super depressed and worried that my DH has messed up our finances...

theartistformerlyknownas

@sugargirl1019 if it makes you feel any better, a friend of mine is a realtor and had to cut an $80,000 tax check last year. 

CrazyCatLady3

We are going to get hosed pretty badly this year on the marriage tax penalty.  Politicians keep talking about abolishing it, but it never happens.

thisismynickname2

Thanks for providing the links, ladies. As we just got married over a month ago, we've been talking for awhile about seeing a financial planner and playing with the numbers. This is really helpful!  

We both have health insurance and contribute to 401ks, but I'm fairly certain right now I'd be bumped from 25 to 28% with the filing jointly or separately. 

Plus, I have no idea what happens the year you get married. 9 months of single, 3 months of married. Uhhhhh?  (Rhetorical question. We'll find an advisor.) 

theartistformerlyknownas

thisismynickname said:

Thanks for providing the links, ladies. As we just got married over a month ago, we've been talking for awhile about seeing a financial planner and playing with the numbers. This is really helpful!  

We both have health insurance and contribute to 401ks, but I'm fairly certain right now I'd be bumped from 25 to 28% with the filing jointly or separately. 

Plus, I have no idea what happens the year you get married. 9 months of single, 3 months of married. Uhhhhh?  (Rhetorical question. We'll find an advisor.) 

Don't quote me on this, but I THINK it all counts together. Just like if you have a baby on 12/31 at 11:59 you get the child deduction for the whole year. (Parents pushing for New Year babies are totally doing it wrong!) ;-)

ETA or, I suppose, not pushing! :-p

jenna8984

lolo883 said:

thisismynickname said:

Thanks for providing the links, ladies. As we just got married over a month ago, we've been talking for awhile about seeing a financial planner and playing with the numbers. This is really helpful!  

We both have health insurance and contribute to 401ks, but I'm fairly certain right now I'd be bumped from 25 to 28% with the filing jointly or separately. 

Plus, I have no idea what happens the year you get married. 9 months of single, 3 months of married. Uhhhhh?  (Rhetorical question. We'll find an advisor.) 

Don't quote me on this, but I THINK it all counts together. Just like if you have a baby on 12/31 at 11:59 you get the child deduction for the whole year. (Parents pushing for New Year babies are totally doing it wrong!) ;-)

ETA or, I suppose, not pushing! :-p

lol yup! The IRS only cares about fiscal year, not months of that year or when it happened. (unless talking about other things like a dependant living with you more than half the year)

kgd7357

Thanks for all the chat!  think this thread has been great for both a little venting and informing!

Jells2dot0

I wasn't sure what our marriage penalty was, as we use an accountant, so I took a look at the website. Yeah, wish I hadn't done that. LOL I'm just going to keep on doing what I do and hope the professionals keep doling out good financial advice. We are on target for early retirement, can cover our substantial tax liabilities, and still have a little fun in our free time

spelling

ShesSoCold

LOL this typically sucks but it looks like my low income will bring H's higher income down into the 15% (where he's been at 25% the last several years) if we file jointly. 

Sugargirl1019

@Lolo883 how in the world??? 80,000?? I'm not sure how that makes me feel better lol

sal2015

I hadn't even thought about this. I don't think our's will be too bad, but my taxes have always been so simple before. Hopefully this isn't too tricky to figure out next year.

hellohkb

I'm currently not working so I'm not too worried about this
FI makes a nice salary so I'm wondering if when I do start working down the line l, will we get a tax penalty?

My mom's FI was nervous because when they get married they will definitely have tax penalties.

JennyColada

jenna8984 said:

@jells2dot0 I totally wish I could afford to come anywhere near the maximum contribution lol. I do 10% right now and I'm still WAY under the max.

Tell me about it! I'd have to put in about 30% of my income to hit the max!

Fi makes enough of a base salary that he actually max's out on SS taxes. I didn't even know that that was POSSIBLE.

ohmrs2014

I left my W2s at single 0, so did DH.  My parent's accountant said this was totally fine.  Our salaries are also at opposite ends of the number line, he makes significantly more than I do.  This will be our first year filing together, so I'm sure it will be interesting.

I do know that now that we are married, I need to put his income on my student loan info which will kill me in monthly payments and I probably won't be able to do income based repayment anymore.

Jells2dot0

JennyColada said:

jenna8984 said:

@jells2dot0 I totally wish I could afford to come anywhere near the maximum contribution lol. I do 10% right now and I'm still WAY under the max.

Tell me about it! I'd have to put in about 30% of my income to hit the max!

Fi makes enough of a base salary that he actually max's out on SS taxes. I didn't even know that that was POSSIBLE.

Both DH and I max out on SS contributions each year. When it first happened, I was "omg- did I get a raise??" that was wishful thinking! We always look forward to the fall when it's fake raise time!

JennyColada

@Jells2dot0, DH is the same way! He gets all bummed out at the beginning of the year because has to pay SS again. It's hard to feel pity for him though. lol.

mrsdelkins

WOW I had no idea this could be a thing!  I'm so sorry you guys had to or are going through this, but this has been an incredibly informative and helpful thread.  Thank you!

huskypuppy14

Remember, if you are bumped up to the next tax bracket, it's only that amount over the previous tax bracket that you have to pay the increased % on. 

So if you make 150,000 dollars together, and the max is 148,850 for the 25% tax bracket, you are only paying 28% on 1150 dollars, it's not on the total.  

I also think it's unfair that if you live in a high cost of living area, that you're still paying the same amount of taxes as someone making the same amount in a low cost of living area. Making a 100K in NYC is a lot different than making 100K in middle of nowhere Kansas.

Jells2dot0

huskypuppy14 said:

Remember, if you are bumped up to the next tax bracket, it's only that amount over the previous tax bracket that you have to pay the increased % on. 

So if you make 150,000 dollars together, and the max is 148,850 for the 25% tax bracket, you are only paying 28% on 1150 dollars, it's not on the total.  

I also think it's unfair that if you live in a high cost of living area, that you're still paying the same amount of taxes as someone making the same amount in a low cost of living area. Making a 100K in NYC is a lot different than making 100K in middle of nowhere Kansas.

I know with my job, if I moved to a HCL area, my salary would go up. When we were in the middle of deciding where to relocate, we were given the chance to move to CA. The company was handing out 15-20% COL raises for those who decided to go there. I also know that my counterparts in places like KS and NM make less, since the COL is less. 

hellosweetie1015

I'm not sure either one of us will be hit, as it looks like we will stay in the same bracket. Not terrible. 

I'm going to see where I need to hit on taxes before the year is out. Too bad I have to go hunt down a final paystub (not to mention make sure the W2 comes to the right address... ugh...

princessleia22

I make quite a bit more money than DH.  Combining our incomes will put move him up from 15% to 25% bracket, but I'm already at 25%.  My income varies year to year (and most of my income comes late in the year) so I'm not sure yet if filing separately or joint would be better.  If my income is on the lower end this year, filing separately may keep him in 15% range and actually benefit us.  If my income is on the higher end this year, the lower limits for filing separately could push me into the 28% bracket, which would probably cost about the same in extra taxes as us filing jointly and his income moving up to 25%.  But, if we do pay extra, I expect our additional tax will be about 2k, which is more than I'd like to pay but not as bad as it could be.

It really just depends on where your incomes fall in the brackets.  When it was more common for wife to stay home or only work part time, getting married could allow couples to drop to lower tax bracket, creating tax savings.  Since most couples today are both working, it usually pushes the combined income into a higher bracket and costing more money.  So, you will feel this more if both parties have full-time, well paying jobs than if you have wide difference in income.  If DH and I had married a couple years earlier, while he was only working part-time, it probably would have dropped my income to 15% bracket and saved us a lot of money.

jules3964

huskypuppy14 said:

Remember, if you are bumped up to the next tax bracket, it's only that amount over the previous tax bracket that you have to pay the increased % on. 

So if you make 150,000 dollars together, and the max is 148,850 for the 25% tax bracket, you are only paying 28% on 1150 dollars, it's not on the total.  

I also think it's unfair that if you live in a high cost of living area, that you're still paying the same amount of taxes as someone making the same amount in a low cost of living area. Making a 100K in NYC is a lot different than making 100K in middle of nowhere Kansas.

I so agree!! I say this all the time. It seems like areas with outrageous costs of living (NYC, San Francisco, etc.) should be taxed differently. We live near SF and basically live the same as someone living in the middle-of-nowhere making half (or more) what we make, but are taxed as if we live luxuriously. 

But… we like living here, so we deal with it.

JennyColada

jules3964 said:

But… we like living here, so we deal with it.

"Why is it so expensive to live in Southern California?" *looks at the sky* "Because it's worth it!" says one of my friends often, haha.

wrigleyville

ohmrs2014 said:

I do know that now that we are married, I need to put his income on my student loan info which will kill me in monthly payments and I probably won't be able to do income based repayment anymore.

This pissed me off more than anything. We don't have a joint checking or savings account, and we each pay the bills that are "ours", like our student loans. It doesn't make sense for my debt to suddenly become H's debt, and vice versa. So when I realized I'd have to claim him and watched my payment jump up, I was like, "But he isn't helping me!!! I don't actually have more money!"

steph861

We've been filing as common-law for several years now (there's no difference between married and common-law as far as the Canada Revenue Agency is concerned). When we first started filing as common-law, all that happened was that our refunds were lower.

Aray82

wrigleyville said:

ohmrs2014 said:

I do know that now that we are married, I need to put his income on my student loan info which will kill me in monthly payments and I probably won't be able to do income based repayment anymore.

This pissed me off more than anything. We don't have a joint checking or savings account, and we each pay the bills that are "ours", like our student loans. It doesn't make sense for my debt to suddenly become H's debt, and vice versa. So when I realized I'd have to claim him and watched my payment jump up, I was like, "But he isn't helping me!!! I don't actually have more money!"

I hadn't even thought about the student loan thing! We are both still students and barely make $30k between the two of us :O

cupcait927

jules3964 said:

huskypuppy14 said:

Remember, if you are bumped up to the next tax bracket, it's only that amount over the previous tax bracket that you have to pay the increased % on. 

So if you make 150,000 dollars together, and the max is 148,850 for the 25% tax bracket, you are only paying 28% on 1150 dollars, it's not on the total.  

I also think it's unfair that if you live in a high cost of living area, that you're still paying the same amount of taxes as someone making the same amount in a low cost of living area. Making a 100K in NYC is a lot different than making 100K in middle of nowhere Kansas.

I so agree!! I say this all the time. It seems like areas with outrageous costs of living (NYC, San Francisco, etc.) should be taxed differently. We live near SF and basically live the same as someone living in the middle-of-nowhere making half (or more) what we make, but are taxed as if we live luxuriously. 

But… we like living here, so we deal with it.

I don't live in a HCOL area so my paycheck goes a lot further, but I live in an area (WNY) that has some of the highest property taxes in the country. It's insane what people around here pay in property taxes. H and I talk all the time about moving because this state has gotten ridiculous with what we're taxed on and the rate at which we're taxed.