Before I begin today’s post I just want to say – THANK GOD IT’S OVER! The historic campaign seemed to go on forever. Congratulations to President-Elect Barack Obama.
And now – today’s question -
Q. My finance and I will be married this fall. Can we change our W-4’s to show Married and have less money taken out now?
And now – today’s question -
Q. My finance and I will be married this fall. Can we change our W-4’s to show Married and have less money taken out now?
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A. Yes you can.
A. Yes you can.
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However you may not want to have less money withheld. On the contrary - you may want to have more withheld as you may be victims of the dreaded (almost as much as the AMT) “marriage penalty”. If you both work you will not pay any less tax – you will pay either the same or more!
However you may not want to have less money withheld. On the contrary - you may want to have more withheld as you may be victims of the dreaded (almost as much as the AMT) “marriage penalty”. If you both work you will not pay any less tax – you will pay either the same or more!
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As your status will be “married” on December 31st (the last day of the year) you must file your Form 1040 for the entire year as married – either joint or separate.
As your status will be “married” on December 31st (the last day of the year) you must file your Form 1040 for the entire year as married – either joint or separate.
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I tell two-income married couples that at least the spouse with the lower income should claim “Married- But Withheld at the Lower Single Rate- 0”.
I tell two-income married couples that at least the spouse with the lower income should claim “Married- But Withheld at the Lower Single Rate- 0”.
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If other aspects of your situation will change in the fall, such as the purchase of a home that generates real estate tax and mortgage interest deductions, they may help to wipe out some or all of the additional tax from the marriage penalty. However, if you will be purchasing the home late in the year (i.e. the fall) you may not have enough deductions for the year to be able to itemize.
If other aspects of your situation will change in the fall, such as the purchase of a home that generates real estate tax and mortgage interest deductions, they may help to wipe out some or all of the additional tax from the marriage penalty. However, if you will be purchasing the home late in the year (i.e. the fall) you may not have enough deductions for the year to be able to itemize.
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My advice to you is to not change your withholding statuses for 2008. Keep your W-4s at Single. This way you will not find yourself in shock next February. You can evaluate your situation after you file your 2008 tax returns and make changes to your W-4s for 2009 if appropriate.
My advice to you is to not change your withholding statuses for 2008. Keep your W-4s at Single. This way you will not find yourself in shock next February. You can evaluate your situation after you file your 2008 tax returns and make changes to your W-4s for 2009 if appropriate.
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When preparing your 2008 Form 1040 you may want to consider filing separately. As I advise any clients and readers faced with options – you should calculate the federal and state tax liability filing both joint and separately and compare the results. Check out my posts JOINT OR SEPARATE? THAT IS THE QUESTION! - PART ONE and TWO.
TTFN
When preparing your 2008 Form 1040 you may want to consider filing separately. As I advise any clients and readers faced with options – you should calculate the federal and state tax liability filing both joint and separately and compare the results. Check out my posts JOINT OR SEPARATE? THAT IS THE QUESTION! - PART ONE and TWO.
TTFN
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