Gird Your Loins. Marriage and Taxes.
ByI am a word person. Always have been. You can play with them, re-order them, make them say all kinds of interesting and creative things. Numbers? Well, I only like them when they are really, really big, sitting in my checkbook not committed to anything in particular. Just waiting for me to log on to www.zappos.com.
Husband is a numbers person. Taxes, financials, accounting. He does it all. He likes to order them, file them, basically beat them into submission. I do believe I have married the only man on the planet who gets positively giddy when the UPS man delivers the new year’s tax code book. Seriously. See this?
That’s Husband holding the tax code. He is smiling, he says, because this rather thick book is filled with all kinds of goodies about deductions.
When Husband first brought up marriage with me, he quickly backtracked saying we should just live together. It’d be cheaper, he announced. He’s right. Marriage has not been kind to our tax status.
Recently, I came across an interesting article from the UK on how couples are wedding later in life. The line that got me was: The figures sparked, once again, a debate over whether married couples should enjoy tax breaks.
In the U.K., according to this article, it has been calculated that approximately 1.8 million low-earning couples are materially worse off than their single parent counterparts, losing on average £1,336 a year because they live together.
I made a huge mistake in mentioning this to Husband. (One thing you learn early in marriage is that timing is everything. You have to know when to bring up stuff.)
Mentioning this blog post, in development, gave him an excuse to rail about Congress, the current administration, the mounting national debt (or the national black hole), and how I still haven’t printed out some report form Quickbooks that he needs, like, yesterday.
But, this is not unusual. Every time tax time comes around, Husband grumbles about how much more money we’d make it we were just legally single and living together.
According to this year’s tax code, the marriage penalty starts, Husband says, somewhere between $86,000 and $137, 000 – jointly. Quite a spread. And, if we made the low end, well, we’d have to live with my mother. Forget being married.
The tax ramifications around marriage are different for every couple. So, just for grins, I googled.
- Marriage and Taxes from the Groom Grove (don’t ya just love that title)?
- Bad Tax Idea: Getting married without checking on the tax ramifications, by Profitable
- The Marriage Calculator: Financial Consequences of Marriage Decisions by the US Dept of Health & Human Services
- The Myth of the Marriage Penalty by Liz Pulliam Weston on MSN Money
- Getting Married by TurboTax
- Marriage Penalty: I don’t think so by Living Single blogger Bella DePaulo, published by Psychology Today
Read it and weep.
(Note to all readers: I am NOT giving out tax advice. You’ll need someone much smarter with numbers than me for that. Talk to your accountant.)
5 Comments
February 24th, 2010 at 10:47 am
You had me laughing at the teaser in my inbox. German tax code is equally unfair. I’ve been lobbed into a 50% tax bracket, thanks to Hubby. So when I receive that paycheck, I divide by two.
Sigh.
February 24th, 2010 at 6:27 pm
I would like to clarify Wife’s characterization of the marriage penalty. It mostly affects two near equal earner couples and usually helps one earner couples. Let me also say that I am not AT ALL happy about anything related to the US Tax Code. No matter what your political, economic, or tax position, it’s hard to find anyone who is happy about the complexity of taxes (excepting a few tax preparers). Wife doesn’t want to know anything about taxes except what to pay and I can’t say I blame her. I admit, I do like the arrival of the Master Tax Guide because it attempts to add explanation to this year’s changes and to help navigate new tax situations. And no, I am not a masochist. Every small business owner needs some level of tax knowledge, unless you are so very fortunate to be married to someone who does.
February 25th, 2010 at 5:21 pm
I remember way back in our first year of marriage when we didn’t know or understand about the marriage penalty. Our employers changed our withholding to “married” (which should make sense once you’re married) but employers take out less when you choose married over single even though you actually owe more in taxes. The theory behind the marriage penalty is that a married couple has less expenses than 2 single individuals (at least that’s what they told us in tax class.)
I cried when I saw what we owed that year, but there’s still no way that I would avoid marriage to save on taxes (even a tight wad like me isn’t that thrifty.)
February 25th, 2010 at 5:41 pm
Yes, I would HOPE one wouldn’t choose to get married because of taxes.
But, Husband still jokes about it all the time. (And, I can tell you my food bill alone defies the “2 can live cheaper than 1″ stuff.)
March 1st, 2010 at 9:27 pm
And what’s this about living with Mom????
Love [Husband's] smile!
Mom