Is it better to marry now or wait, tax-wise?
Sunday, October 16th, 2011 at
2:42 pm
I’m getting married soon. Wе′re talking аbουt mid-December tο early January. Mу fiance hаѕ three children, whο hе hаѕ primary custody οf аnd I hаνе one child. Sіnсе wе′ve selected a time ѕο close tο thе first οf thе nеw year, I thουght аbουt thе tax situation. Iѕ іt better tο marry іn December аnd file Married/Jointly wіth 4 dependants οr fοr mе tο file Single, Head οf Household wіth one dependant аnd gеt Earned Income Credit аnd fοr hіm tο file single wіth four dependants? I don’t see іt аѕ a bіg deal іf іt’s a small dіffеrеnсе, bυt a large dіffеrеnсе сουld mаkе thе honeymoon much sweeter!
Run the numb ers
my CPA told me when I got married (a few Junes ago) that you can get married at 11:59 pm on December 31st, you can claim married/joint all year and you really do see mucho benefit on your taxes when you get married. congrats!
If you get married, your best bet is to file MFJ. At the moment, you have at leat $31,000 in deductions when taking into account the standard deduction and personal exemptions. If you itemize, your deductions are going to be higher. Also, you may have up to $4000 in Child Tax Credit. If this is the case, you may not owe any taxes.
If you do not get married, you will need to claim your child unless your fiancee is the father. If you are eligible to claim EIC, I say go for it since it is a refundable credit. In this case, you could get a tax refund that is higher than the amount of tax that was withheld from your paychecks.
To see what the difference is going to be, do a projection of what you expect your tax return will look like based upon your current paychecks. You have to compare tax returns assuming that you are single and married.
The general rule of thumb is:
Get married after January 1st.
Get divorced before January 1st.
Of course, each situation is different.
You need to do an estimated return both ways to know. You haven’t given enough info.
If either one or both of you are getting a large EIC and together will make too much to get EIC, then the answer is probably to wait until January to collect your large EICs. But otherwise, it probably won’t matter much either way.
Without knowing your incomes, whether you own a home, etc I cannot tell. HOH is $7k something standard deduction whereas mfj is 10700. Most likely it is better to wait. Your combined incomes may eliminate EIC.
It may be a slight advantage to do it next year, but the only way to know is run the numbers and see.
Congratulations on your engagement.
Anna del C.
Author of “The Elf and the Princess”
and “Trouble in the Elf City”