Getting Married and Taxes

PirateintheSky

This is the one thing I have yet to fully grasp about getting married.  I understand about how to change my name, how our credit scores won't merge, when/where to get the marriage liscense, etc. Any tax accountants out there?  But what does filing married actually change? Are we going to lose money? He is currently still in school and will be for a couple more years, and I have a fairly cushy job, but its definitely not up for supporting two people and paying for his school if he loses too much of his FAFSA money. Is there any other way to find this out, or should I just venture into my neighborhood HR Block (although I really don't know want to do this)?

Calypso1977

not an accountant, but i do know there is something they call "the marriage penalty" when you file your taxes.  also, yoru income WILL count towards his FAFSA  application, adn the "expected family contribution".

LesPaul

I'm a CPA.  There are so many variables with your individual situation, it's too hard to make blanket statements about what will happen with FAFSA and tax situation.  Your filing status is determined on 12/31/2010.  Since you were married in 2010, your status will be married/joint or married/separate - you cannot file single or head of household if you are married.  It is rarely advantageous to file married/separate - you have to have very specific circumstances to make this a better answer than filing jointly.  Do you use TaxCut or TurboTax?  The software will compare joint vs. separate filing for you, or you can prepare returns under different scenarios (without filing) to see the options. 

If you're not comfortable with using the software yourself, I would recommend hiring a CPA to help.

pirategal03

Dito LesPaul.

Your local H&R Block probably isn't going to be able to give you a good answer here.  They're not really trained in tax planning. 

The "marriage penalty" isn't a trulyreal thing, it's just the effect that some people have when they file jointly for the first time.  Often they have taxes withheld based on their individual income and filing single, then taxes are assesed based on joint income and filing married and taxes need to be paid.  Some people call that the marriage penalty.

PirateintheSky

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_getting-married-taxes?plckFindPostKey=Cat:Wedding BoardsForum:9Discussion:b7116855-dfb8-4ce0-ac11-5b4f3a11d3ddPost:7b2e932b-ad5b-4bc4-8192-b2f008708f8a">Re: Getting Married and Taxes</a>:
[QUOTE]I'm a CPA.  There are so many variables with your individual situation, it's too hard to make blanket statements about what will happen with FAFSA and tax situation.  Your filing status is determined on 12/31/2010.  Since you were married in 2010, your status will be married/joint or married/separate - you cannot file single or head of household if you are married.  It is rarely advantageous to file married/separate - you have to have very specific circumstances to make this a better answer than filing jointly.  Do you use TaxCut or TurboTax?  The software will compare joint vs. separate filing for you, or you can prepare returns under different scenarios (without filing) to see the options.  If you're not comfortable with using the software yourself, I would recommend hiring a CPA to help.
Posted by LesPaul[/QUOTE]


We weren't married in 2010.  I messed up the date when I originally entered it because I was used to putting 2010.  In fact the date in April has changed also, so none of the date is right. Thank you for your advice though, I'll probably end up talking to someone about it before we get married.  Its not like we'd call the wedding off.  But I want to know what I'm getting into.

Calypso- I know that my income will count, but I was more wondering if there was a way to figure out a number of how big of a chunk its going to take out.

Calypso1977

can you go onto the FAFSA website and find a calculator where you can key in estimated amounts?  i know the EFC is always a ridiculous number.... they told me as a single person when i went back for my master's that i could "afford" like $10K a year for my schooling... yeah, right.

PirateintheSky

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_getting-married-taxes?plckFindPostKey=Cat:Wedding BoardsForum:9Discussion:b7116855-dfb8-4ce0-ac11-5b4f3a11d3ddPost:454467ee-30f5-4f18-8c05-185f1d900d11">Re: Getting Married and Taxes</a>:
[QUOTE]can you go onto the FAFSA website and find a calculator where you can key in estimated amounts?  i know the EFC is always a ridiculous number.... they told me as a single person when i went back for my master's that i could "afford" like $10K a year for my schooling... yeah, right.
Posted by Calypso1977[/QUOTE]

I'll check it out later when I'm with FI.  Its been so long since I've navigated FAFSA, and I hated doing it even when it was for me.

Calypso1977

its easier now in that its all online, particularly for subsequent years of school when you go to renew... wehn i went to undergrad, it was pen and paper.  a total drag. 

zippityb

Alls I know is that I'm effed this year and should have gotten all of my expensive dental work done last year as it would have been tax-deductible for just my income. Now that we are married, it's not.

emyinpink

The tax system in our country is tailored to benefit one income higher than the other. If you and FI have unequal incomes, you will likely pay less combined in taxes once you're married. If, in contrast you make equal/near equal salaries (like myself and FI), the amount you pay annually in taxes will increase, in addition to not being eligible for many deductions (I think we calculated that we're going to pay 5 grand more in taxes once we get married, ridiculous!)

mattandrachael2011

I am a Financial Aid professional and I can tell you that if you have a decent income and it is just the two of you, getting married will probably cause your husband to lose some, if not all, of his financial aid.  The FAFSA website (fafsa.ed.gov) has a new tool called the FAFSA 4CASTER where you can estimate your EFC.  The lower the EFC, the more aid you qualify for.  If the EFC is over $5500, you won't qualify for any Federal need-based financial aid.  If possible, hold off on getting married until he finishes school, or do like me and work for a college where he can finish using free spouse tuition benefits!

kapilot

Is he in undergrad or grad school? In undergrad it would have more of an affect then in grad. 

If he's in undergrad then your income would probably keep him from getting grants, his financial aid package would probably consist of straight loans but he should be awarded enough that you won't have pay anything out of pocket expenses. 

If he's in grad school, you two getting married shouldn't matter because there are very few grants for grad students and they are only awarded in extreme situations. If he's a law or medical student then your marriage should have no affect whatsoever because he's not supposed to be working at all, thus they should still award him the maximum loan amounts. My fiancée is a law student, we went over this is great detail. 

I believe you said you weren't getting married until April 2011, so your marriage won't be counted in his FAFSA until the 2012-2013 school year. His FAFSA for the 2011-2012 school year should have already been submitted and possibly processed by your wedding day. 

I hope this helps.

jenithing

I am an accountant and thats why we have put off getting married. We h ave 2 children and make $8000 every year around tax season, if we were to 'officially' get married we would only get $2000. So we aren't signing the license etc... just doing a commitment ceremony. Make sure though your the benfiniary on the others stuff.

mpelosi520

OMG the FAFSA situation never even crossed my mind. I'm SO screwed. His income is higher than mine and he works alot of overtime so when we do our taxes together it's going to seem like he's making tons. I have one more year of school -but its part time - so it could potentially turn out to be two calendar years. we won't be married until sept. 2011 so hopefully come april 2012 I'll have finished 3/4 of that school year. so glad someone remembered to bring this up and post it here i never would have realized.....

ashlidie

it is not a ridiculous number really.  I had an EFC of 0, and let me tell you, my dad and I barely made it by.  FAFSA is the one and only reason I got the financial aid I needed to get my degree.  Without it, school just would not have been an option.

on a side note, the total family income is an important factor so if you plan to be married soon, I hate to say it but I would expect that the EFC will increase.  From my experience, one year my father lost his job but had to cash out all his stock options, so it was like he made a bunch of money (that he couldn't reproduce the next year since he was unemployed, kind of the crappy part of the process) so our EFC was very high because they thought we could produce that money again next year.

In the year immediately following, our total family income dropped to less than 20k for the year (including me working over the summer and dad trying to get other work) and our EFC fell to 0.  My point is that you become a member of his family/household and your contribution counts now, even if you don't pay for his schooling.  Sort of an unfortunate assumption.

mllelupita

FYI: My parents got divorced right before I filed my FAFSA to go to college and therefore my legal guardian (1 parent) only made half of what they had made combined - without that I probably never could have gone to college.  Heck, I might show my future children how much I love them and value their education and get divorced (on paper) for them too - ha!

spellfire72

I have a question.. I have been a single mother and have been filing Head of Household for 15 years.  I have been given a second chance at love with my first true love from 19 years ago and we are getting married 12/4/10.  Silly question: Will I lose the nice chunk of change that i have been getting back for 15 years due to getting married, even though he is not adopting my son right away?

kapilot

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_getting-married-taxes?plckFindPostKey=Cat:Wedding%20BoardsForum:9Discussion:b7116855-dfb8-4ce0-ac11-5b4f3a11d3ddPost:13bb98eb-8588-430a-8564-8aaf3d82173b">Re: Getting Married and Taxes</a>:
[QUOTE]FYI: My parents got divorced right before I filed my FAFSA to go to college and therefore my legal guardian (1 parent) only made half of what they had made combined - without that I probably never could have gone to college.  Heck, I might show my future children how much I love them and value their education and get divorced (on paper) for them too - ha!
Posted by mllelupita[/QUOTE]

<div>
</div><div>My best friend's parents actually just started filing their taxes as married filing separately. They stated they were separated on the FAFSA and have been doing that for at least the last 6 years.</div>

kapilot

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_getting-married-taxes?plckFindPostKey=Cat:Wedding%20BoardsForum:9Discussion:b7116855-dfb8-4ce0-ac11-5b4f3a11d3ddPost:cf5b925b-92a7-4dde-a8a6-f19fcf17e127">Re: Getting Married and Taxes</a>:
[QUOTE]I have a question.. I have been a single mother and have been filing Head of Household for 15 years.  I have been given a second chance at love with my first true love from 19 years ago and we are getting married 12/4/10.  Silly question: Will I lose the nice chunk of change that i have been getting back for 15 years due to getting married, even though he is not adopting my son right away?
Posted by spellfire72[/QUOTE]

<div>There are a lot of factors that play into what your tax liability is going to be. However, there are very strict criteria that define filing statuses, because you're getting married before 1/1/11, you can't file your taxes as head of household anymore. You could either do married, filing jointly or married, filing separately. The status change will probably affect your tax liability and thus your refund, if you get one but you need a tax professional to look at your information to be able to tell you if it would be better for tax reasons to file separately or jointly.</div>

mrswaite2be

I actually called the IRS with a similar question, they have a tax law department they can connect you to and were actually very helpful.  If you dont mind being on hold for 15 minutes or longer I suggest giving them a call you can also check out www.irs.gov but I found that to be really hard to navigate.  Good luck.

jenniewest

I am not sure how old you are as your soon to be husband is still in college.  My brother got married at 19 while in college and he lost a lot of his Financial Aid. His wife worked for a family owned business and was making good money.  It also had an affect on my sister's Financial aid.  Because my parents got more financial aid because they had two kids in college.  After he got dropped, they had to come up with more money for my sister.  This was many years ago and he is divorced now.

Neeter59

We both make pretty good money, so this is something that concerns me.  I've been getting back an nice chunk each year b/c I claim 0 dep, HOH for the last 5 years or so.  But as the song saysl, money can't buy me love.......

12lmurray12

Me and my fiance after a very long time are finally getting married this year. we have children and he has been out of work for almost two years now.......We have been living on one income. Will getting marreid change alot when it comes to filing my taxes and the refund I usually get back or will it pretty much stay the same as no income changes are happeneing?

shearxhappiness

When i was looking up how getting married changes the tax thing, i looked up on h&r block about marriage and taxes. Here's the link that I found:

http://www.hrblock.com/taxes/tax_tips/tax_planning/marriage.html?ttiptitle=Marriage

spellfire72

Thank you for the help....

thereisbeauty_22209556

Try this:

http://www.irs.gov/individuals/page/0,,id=14806,00.html