Going to the courthouse and we're gonna get married

December 2, 2011 8:36 AM

Stay single or get married for tax purposes?

So my SO and I are engaged, super excited, and looking forward to a hell of a wedding celebration in July 2012. But now we're wondering if it would be a good idea to "make it official" before year end to reap the benefits of the "married filing jointly" status (and also for a couple other unrelated reasons).

I think we would save by getting married now, but I'm no pro at this stuff, so I'm turning to the all-knowing metafilter. Here's the breakdown:

-One of our incomes is high-ish (between 70,000 and 75,000)
-One of our incomes is low-ish (between 15,000 and 20,000)
-One of us has been a student all year, while the other has been employed all year
-We have paid significant student loan interest in 2011
-We rent our home
-Neither of us has any investments, real estate, etc. (basically we're super boring as far as filing taxes goes)
-We would both use the standard deduction
-We're both over 25 years old

So to determine how we would pay the least taxes, I went to this site and used the tables to run the single and married scenarios, with the outcome being that we'd save somewhere around $1,500 if we get married this year and file jointly.

Please tell me, metafilter: am I missing something? am I completely off-base with my reasoning? if so, how? are my calculations correct?

Yes, yes: I know you are not my accountant/tax preparer/lawyer. If we could afford one, we would get one. Also, please let's not debate the merits of "making it official" before the big party. I know what's right for me, as I'm sure you do for you.

Thanks, all!

posted by angab to Work & Money (10 answers total)

Best answer: They got rid of the marriage penalty around when I was divorced in 2004 (at least, at my income). I think if one spouse makes high-ish money and the other is low-ish, it is better to be married.
posted by getawaysticks at 8:41 AM on December 2, 2011 [1 favorite]

Since you're not asking for reasons of romance or love, but purely based on $$$$'s you don't need to ask this here, you need to take your information to an accountant/tax person and let them run the numbers. We don't have anywhere near the information necessary to make this determination when the estimate is only $1.5k difference.
posted by tomswift at 8:43 AM on December 2, 2011 [1 favorite]

This was basically our situation when we got married, and we got a significant refund, larger than what you're estimating. I say go for it.
posted by emkelley at 8:44 AM on December 2, 2011 [1 favorite]

I know some folks who are getting married next year (and counting anniversaries from that date etc) but who got 'paperwork-married' last week because it'll save them about $5K in taxes.
posted by rmd1023 at 8:52 AM on December 2, 2011

We are having a wedding next year, but eloped in October because of how many thousands it saved us on taxes for 2011.
posted by sock it to me at 9:05 AM on December 2, 2011

If we could afford one, we would get one.

Your combined income is between $85,000 and $95,000. You can afford a tax professional. Particularly as a decent professional may well actually save you enough in taxes or avoided penalties (because you screwed something up!) to pay for themselves.

One thing to note is that you're already starting to hit the place where the student loan interest deduction phases out really quickly, but if you're married, the threshold about doubles, so that's worth thinking about.
posted by valkyryn at 9:25 AM on December 2, 2011 [5 favorites]

Two things: First, yeah, $1.5k sounds about right. Second, what valkyryn said. A few years ago we won a tax prep session in a silent auction. I'm actually back to TurboTax now, because scheduling didn't work out this year, but the tax preparer's encouragement made us a lot more aggressive about deductions and has saved us a lot of money.

I'm told that you're actually less likely to file a "correct" form with the help of a professional tax preparer than without, so choose your own level of risk, but it's worth paying the $500 or so at least once just to get the additional notions of where there's room in the tax code.
posted by straw at 9:59 AM on December 2, 2011

Your financial situation is simple enough that you probably do not need a tax professional. Why not just pick up a copy of TurboTax or TaxCut or whatever home tax preparation software you like and run the numbers using both single and married scenarios?

Given the low income of one partner and your student loans, it's likely that getting married will save you some money. Whether that sum is meaningful enough to you to get married early will depend on the amount and how much moving up the date would matter to you and your families (if they are planning around a summer 2012 wedding).
posted by The Elusive Architeuthis at 10:00 AM on December 2, 2011

Best answer: Is your partner still going to be in school next year (2012-13)? Is he a graduate or an undergraduate student? If you get married this year, your income will count against his aid eligibility on the next FAFSA, so if he has been relying on any need-based aid (like Pell grants, Perkins loans, other institutional programs), make sure to factor the loss of that aid into your analysis. This generally matters less for graduate students but can be a big factor for undergrads.

Also, if he has plans to use an income-based repayment plan for his student loans, make sure to run the numbers for that as well - his required payments will almost certainly be much, much lower if your incomes are not combined, which might wipe out any tax savings you'd get from being married.

Anyway, congratulations! (and apologies if I parsed your genders incorrectly!)
posted by dialetheia at 10:37 AM on December 2, 2011 [2 favorites]

You make coming up on 95K a year. If you do not have an accounting professional, you are ill-prepared for the financial planning that comes with marriage. If you can't afford an accountant, I am baffled as to you are planning to pay for a wedding.

Get an accountant.
posted by DarlingBri at 3:43 PM on December 2, 2011