Thursday, January 21, 2010

Should I get married sooner to save on taxes?

My fiancee and I have a wedding date for August 2010, but she is planning on quitting her job this October. We are fine with getting legally married earlier (this year) and keeping it a secret if it's advantageous financially. I make substantially more than she does and was planning on adding her to my benefits when she finishes her job. So the question is should we wait to get married until the official date or is there some benefit to getting legally married sooner, either this year or next year. Thanks!!!Should I get married sooner to save on taxes?
Never do anything simply to save on income taxes. In my experience most often people will jump through hoops to get back to where they started from or worse off.





Without actual numbers and many other facts (some of which you may not be able to project accurately) it is ipossible to get an answer here. A consultation with an Enrolled Agent might be worthwhile.





Whatever your marital status is on December 31 determines your status for the entire year. So anytime in 2009 is the same.





As far as keeping it a secret, OK to do so for family and friends, but remember that you are signing the tax return under penalty of perjury, so don't do it on the tax return.





Now, tax impacts aside, hee's an example of the things you really should be considering. You might want to get her on your benefits sooner rather than later. God forbid she needs serious medical attention and she is between inurance providers because her job was finished and you had not yet married.





The amount of tax savings (if any) is small compared to the possible loss you would face in this worst case scenario.





Look at the big picture, not just tax effect.





BTW, Congratulations!Should I get married sooner to save on taxes?
It might save you some on taxes to get married this year, but not necessarily. You'd have to calculate it both ways. Unless she has at least one child and gets EIC, you'd probably pay less total tax if married in 2009.





The larger issue might be adding her to your benefits if you aren't married yet - that might or might not be allowed.
The answer is definitely maybe. Project your mutual incomes to the end of the year and prepare IRS form 1040-ES separately and jointly. (It's OK, because it's just pretend) then decide what's better. You can add an extra $400 each for making work pay credit .
if you get married before dec 31 and you are both working you get a married couple credit but if you dont need to worry about money and she is going to quit her job anyways then you arent going to benefit from it after this next year anyways unless she keeps her job
Most employers will not let you add her to your benefits until you are legally married. That alone might be a reason to get married sooner.
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