Okay, I'm going to bring up the subject of money because, quite frankly, American tax laws suck. Somehow it feels like a very touchy thing to talk about on a blog but I'm so frustrated with our system and I really have to idea what to do about it.
We now have W2s in hand and have begun the process of figuring out how much money is Uncle Sams and how much is ours. Along the way it occured to us to wonder about the "marriage penalty" seeing as we are planning on getting married this year. So, just for idle curiosity, I did a "what if we were married" and we calculated the taxes. And, WOW. Assuming that our incomes don't change we could expect to be penalized a LOT of money for being married, and we're talking thousands of dollars. Part of that is a change in tax brackets and part of that is the losses of several deductions. It would turn our refunds into a gigantic neon sign saying "money owed". I could cry right now.
Of course, that leaves us with the question of "now what?" That "extra money" isn't really extra and not having it would wipe us out. I suppose technically nothing says we have to be married since we aren't planning on having more kids and we have our own insurance policies through work. But not get married? I don't want to give that up.
Our state recognizes domestic partnerships and they do apply to hetero couples as well so maybe that's worth looking into so we could continue to file single (they aren't recognized at a federal level and therefore not by the IRS either). Because, among other things, if we weren't married we would have no legal right to make medical decisions or even be in the emergency room if something happened to the other person. But, in a DP we would have those rights. I'm wondering what the legal ramifications are exactly? Can we enter a domestic partnership and have my last name changed? Is that legal? Or should we just have a not-legally-binding commitment ceremony and draw up papers with a lawyer to cover the medical decision choices and whatnot? This is supposed to be simple. Why can't it be simple?
Anyone have an idea? What would you do in that kind of situation?
I recommend sitting down with a good, honest and experienced accountant. The system is so convoluted there may be filing options for married couples that the rest of us are in the dark about. Best of luck. Wishing you married financial bliss.
ReplyDeletei have no clue really where to begin with that but I like angie's advice. good luck!
ReplyDeleteOh My...now I know why we never get anything back!!! I know of a couple who actually got divorced in order to get Medicaid when they had another baby... that's insane!!!!!!
ReplyDeleteI hope you figure it out and get married, you two are so in love and made for each other you should be married...the financial stuff will work out and yes advice from an accountant would be good.
p.s. ADORE that picture!!!!!!!!!!!!! you rock.
p.p.s. I never have enough cash around to take a pic like that!!! hahahaha
ReplyDeleteAngie ~ Thanks for the advice. I figure I'll talk to an accountant and if that fails (those are the rules and I really don't see any way around them) then I'll find a lawyer to walk me through the other options I guess.
ReplyDeleteChar ~ Thanks. :)
McGillicutty ~ Normally I don't have any cash either but it worked out perfectly that I had $35 in my purse for a change.
Love the picture. Fabulous. I'd be interested in hearing any details you find if the accountant comes up with any ways to circumvent the marriage tax penalty.
ReplyDeleteWe were married for 2 days in 2009 and we have to file as married, and those two days will cost us $8,000. That's right ladies and gentlemen, $4,000 a day for the pleasure of being married in 2009.
ReplyDeleteAnd yes, we have a tax accountant. We had to figure this all out the first week or two of January because the husband files quarterly. He pulled my ass up into his tax bracket, and we lost a bunch of deductions that we each had previously enjoyed as single parents and heads of household.
The best part is that there is no marriage penalty allegedly, and even if you google it, most of the literature says that "most" people save money being married!
It's a big fat lie.
I'm still pissed about it.
Is there a large payment difference between "married filing jointly" and "married filing seperately?" I know Federal taxes give you the option of choosing. (Don't know about Nevada though) I don't think it works if you have a joint mortgage or other large shared assets or deductions but I think it might help in your situation... maybe?
ReplyDelete-lee* (little-little)
Hmmm, I'm not sure but I'll see if hubs knows. He married me tho which I'm guessing he wouldn't have if he had any idea how much I'd cost him!! LOL
ReplyDeleteWow, I had no idea about any of this. I hate America. I'm making my boyfriend move to another country with me.
ReplyDeleteAmerican tax law is a convoluted mess of indecipherable crap. Even the people who practice tax law for a living don't always get it right.
ReplyDeleteIt's not too bad if you have enough money to offshore investments. It's not too bad if you don't make very much money. It's freaking horrible if you're somewhere in the middle.
What exactly are we getting for our 39% tax? The "right" to pay back the ever increasing amount of money the government keeps borrowing from China? The time for a revolution has come. This corrupt government and everything it stands for needs to go. Vaporizing Washington D.C. would be a good start...
I'm still in shock that it would cost us $1,000 per month to be married. Argh... So depressing.