| User | Post |
|
12:25 pm
November 14, 2011
|
Aaron Hung
| | |
| Member | posts 254 | |
|
|
I recently got married and was wondering how I go about adjusting my W-4…Should I leave it at 0 just to be sure I don't owe Uncle Sam anything? Or do I put it at 2?
I know by putting in 2, they would take out less per paycheck, but doesn't that raise the risk of me having to pay back at the end of the year?
|
|
|
|
|
1:15 pm
November 14, 2011
|
Miss T @ Prairie Eco-Thrifter
| | |
| Member
| posts 2213 | 
|
|
|
I would love to help but in Canada we have different rules.
|
|
|
|
|
2:11 pm
November 14, 2011
|
The College Investor
| | San Diego, CA | |
| Admin
| posts 1935 |
|
|
|
The first year is the toughest. I would say let Uncle Sam take out as little as possible and owe in April. Then, once you figure out your total tax bill, adjust both you and your wife's withholding accordingly.
P.S. Congrats!
|
|
|
|
|
2:43 pm
November 14, 2011
|
retireby40
| | USA | |
| Member
| posts 1381 |
|
|
|
I'm in the same camp as the College Investor. I would leave it at 0 and see how it turns out in April.
I think it's better to owe a bit rather than giving Uncle Sam an interest free loan.
|
|
|
|
|
3:14 pm
November 14, 2011
|
Eric J. Nisall
| | Coral Springs, FL | |
| Member | posts 377 |
|
|
|
Ditto for the last two. I had leaving money for a refund at the end of the year, and would rather have it a little bit at a time throught the year.
The first year is the toughest, especially this year, since you got married so late that there isn't that much time for any changes to make a substantial impact on the 2011 return. I'd recommend getting your 1040 done as soon as possible, then assessing your situation early in 2012 and making the necessary W-4 adjustment. You may also want to explore the married filing separately option as in some instances it can be of greater benefit than filing jointly. Just be careful, because some credits/deductions are lost with this option such as any education credits.
|
|
|
|
|
4:04 pm
November 14, 2011
|
Dominique Brown
| | Washington, DC | |
| Member | posts 510 |
|
|
|
Depends on your combined income.. but let me tell you my first year of marriage I got destroyed by uncle sam. We both put 0 on the W-4 and fear the tax man :-(.
|
|
|
|
|
7:50 pm
November 14, 2011
|
PK @ DQYDJ
| | The Intersection of Politics, Economics and Personal Finance. | |
| Moderator
| posts 361 |
|
|
|
I would quickly run through the IRS Withholding calculator:
http://www.irs.gov/individuals…..96,00.html
I wouldn't worry as much about overpaying this year – as long as it isn't a huge amount. You're getting ripped off by overpaying the IRS since you're giving up interest that would grow in a savings account… but interest isn't that high right now, haha. You'll know better next year how it all stacks up, but if you want to play with the W-4 now that worksheet will help.
|
|
|
|
|
7:50 pm
November 14, 2011
|
PK @ DQYDJ
| | The Intersection of Politics, Economics and Personal Finance. | |
| Moderator
| posts 361 |
|
|
|
I would quickly run through the IRS Withholding calculator:
http://www.irs.gov/individuals…..96,00.html
I wouldn't worry as much about overpaying this year – as long as it isn't a huge amount. You're getting ripped off by overpaying the IRS since you're giving up interest that would grow in a savings account… but interest isn't that high right now, haha. You'll know better next year how it all stacks up, but if you want to play with the W-4 now that worksheet will help.
|
|
|
|
|
4:52 am
November 15, 2011
|
Glen Craig
| | |
| Member
| posts 1087 | |
|
|
I wouldn't worry as much about overpaying this year – as long as it isn't a huge amount. You're getting ripped off by overpaying the IRS since you're giving up interest that would grow in a savings account…
You have only a handful of paychecks left so I wouldn't sweat it for this year either way. Besides, what you overpay would earn what? 1% in a good savings account? If you need the extra money then that's a different story…
You could always split the difference and declare 1?
If I recall correctly, 0 means they take the most taxes out?
A calculator or a good tax accountant would be the best bet. We can't really say because we don't know all of your details (and I'm certainly not an accountant).
|
|
|
|
|
8:16 am
November 15, 2011
|
Suba @ Wealth Informatics
| | |
| Moderator
| posts 1876 |
|
|
|
Interest free loan to IRS is overrated :)
I overpaid the first year (the few thousand dollar you potentially overpay would earn what?). And also I preferred a smaller paycheck when we got married. So that we will budget with less and it was a forced saving before we got into the cycle of savings and goals. I got it right only the 3rd year, now it is give or take $50-$100.
The first year (esp. as you got married late in the year) will also net a refund because both of you paid as a single all the year. The second year if both of you change, based on the income bracket and other deductions, you might end up owing.
So play with the calculator PKamp3 linked to, expect to get it wrong the first time and adjust. For us the right withholding came with a mix, I withhold mine as married, my husband as single and we have a few exemptions to fine tune it.
|
|
|
|
|
9:00 am
November 15, 2011
|
Aaron Hung
| | |
| Member | posts 254 | |
|
|
I see, so you don't HAVE to file 2? She already changed to 2, I'm still at 0.
When it's time to file taxes, We don't HAVE to file married right? even for next year? are there any consequences if we don't?
|
|
|
|
|
9:16 am
November 15, 2011
|
Suba @ Wealth Informatics
| | |
| Moderator
| posts 1876 |
|
|
|
Filing status and withholding is totally different thing. You can be single and put the withholding with 7 exemptions (usually used when you have kids) if you expect to have a lot of deductions (like if you had a lot of mortgage, give a lot of charity…)
Come tax time, you might want to try it out both ways – married filing separately, married filing jointly. Which comes out better is entirely dependent on what each of your salary and personal situation is. For most people MFJ will work out just fine, but I don't think any of us here can guess which would be better for you. You can choose to file either way though.
|
|
|
|
|
10:25 am
November 15, 2011
|
Khaleef @ KNS Financial
| | Fat Guy, Skinny Wallet | |
| Member
| posts 3149 |
|
|
|
Aaron Hung said:
I see, so you don't HAVE to file 2? She already changed to 2, I'm still at 0.
When it's time to file taxes, We don't HAVE to file married right? even for next year? are there any consequences if we don't?
Your only options would be to file as Married Filing Jointly or Married Filing Separately. Your options for filing status is determined by your status on December 31st of the tax year. So the fact that you got married so late in the year means nothing to the IRS.
In the year we got married, I stayed at "single, 0" on my W4 – this will cause the highest amount of taxes to be withheld from your pay. Then I switched to married once I changed jobs in late November.
As Glen said, it won't make much of a difference now since it is so late in the year. Speaking in the absolute broadest terms possible, filing as "Married Filing Jointly" should give you a lower tax burden than "Single". That means that you've most likely overpaid already – since you paid at the single rate for 10.5 months – but since I don't know anything else about your tax situation, I cannot be sure.
|
|
|
|
|
5:04 am
November 16, 2011
|
MoneyBeagle
| | |
| Member
| posts 1466 |
|
|
|
Suba @ Wealth Informatics said:
Come tax time, you might want to try it out both ways – married filing separately, married filing jointly. Which comes out better is entirely dependent on what each of your salary and personal situation is. For most people MFJ will work out just fine, but I don't think any of us here can guess which would be better for you. You can choose to file either way though.
Checking both ways should be a standard practice. It never hurts to check. If you outsource your tax work, they should do this as a matter of course, I would think.
|
|
|
|
|
6:06 am
November 16, 2011
|
Khaleef @ KNS Financial
| | Fat Guy, Skinny Wallet | |
| Member
| posts 3149 |
|
|
|
MoneyBeagle said:
Suba @ Wealth Informatics said:
Come tax time, you might want to try it out both ways – married filing separately, married filing jointly. Which comes out better is entirely dependent on what each of your salary and personal situation is. For most people MFJ will work out just fine, but I don't think any of us here can guess which would be better for you. You can choose to file either way though.
Checking both ways should be a standard practice. It never hurts to check. If you outsource your tax work, they should do this as a matter of course, I would think.
Good point. This should be standard for any good piece of tax software, and all professionals (I always do it for married clients – although not one has benefited from filing separately).
|
|
|
|
|
7:29 pm
November 18, 2011
|
krantcents
| | |
| Member | posts 909 |
|
|
|
There is not that much left of 2011 anyway. Keep it at zero for the rest of 2011. I would base 2012 on an estimate because you not have a full year to use. I usually use the prior year to forecast.
|
|
|
|
|
9:21 pm
November 18, 2011
|
Dominique Brown
| | Washington, DC | |
| Member | posts 510 |
|
|
|
Khaleef @ KNS Financial said:
MoneyBeagle said:
Suba @ Wealth Informatics said:
Come tax time, you might want to try it out both ways – married filing separately, married filing jointly. Which comes out better is entirely dependent on what each of your salary and personal situation is. For most people MFJ will work out just fine, but I don't think any of us here can guess which would be better for you. You can choose to file either way though.
Checking both ways should be a standard practice. It never hurts to check. If you outsource your tax work, they should do this as a matter of course, I would think.
Good point. This should be standard for any good piece of tax software, and all professionals (I always do it for married clients – although not one has benefited from filing separately).
Sounds like a great article to write. Title: Should I file married filing separately?
The entire article focuses on best scenario's to file married filling separately.
|
|
|
|
|
7:17 am
November 19, 2011
|
Jeff @ Sustainable Life Blog
| | |
| Member | posts 964 |
|
|
|
Thanks for bringing this up – I'll be getting married next year and was wondering the same thing – though I'll be getting married in july so it would make more sense for me to switch if it works out to be a better deal.
|
|
|
|
Login
Search 
Home
Print this Topic 
Topic RSS 
