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Old 04-07-2014, 08:59 AM   #1
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Taxes

Sorry not sure if this is the right place to post this question.

This year I saw a significant increase in my taxes. The only significant change was that I married and I filed jointly this year. I made about 150k my wife made about 70k. Last year my refund was about 2500 and my wife owed about 300 (I bought a house) Maybe it's time to start going to a professional this year I owed 2800. I was under the impression that taxes were better when you get married. Anyone know why I would see that big of an increase My salary was up slightly(10k) my wife's was the same.
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Old 04-07-2014, 09:16 AM   #2
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You give so little information it's not really possible to give specific comments as to whether you can effectively use a true tax professional. I would never recommend anyone go to places like H & R Block unless they were mentally limited. Even then, I'd be concerned. Unless you have a very complicated life, you are better off with the tax preparation software. My FIL used to pay a CPA $600 every year to do a very simple tax return.

You make good money and so does your wife. By getting married you have waltzed right into the marriage penalty. You would need to do "what ifs" on your tax software to see what you each would have owed if you didn't get married. How your refunds compare to last year is totally meaningless.

If your new DW decides to retire/become a stay at home mom, your taxes would go down because you would then get the benefit of spreading your income over the married rate.
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Old 04-07-2014, 09:22 AM   #3
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Originally Posted by Retire2035 View Post
Sorry not sure if this is the right place to post this question.

This year I saw a significant increase in my taxes. The only significant change was that I married and I filed jointly this year. I made about 150k my wife made about 70k. Last year my refund was about 2500 and my wife owed about 300 (I bought a house) Maybe it's time to start going to a professional this year I owed 2800. I was under the impression that taxes were better when you get married. Anyone know why I would see that big of an increase My salary was up slightly(10k) my wife's was the same.
You're probably looking at the wrong numbers in that you are comparing your amounts due/refunds and not your tax. Some of the explanation might be that your withholding changed when you got married if you filed a new W-4 with your employer.

How does your tax compare between years?
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Old 04-07-2014, 10:09 AM   #4
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Same comments as the others. Check the actual tax calculation, not just your refund. And at your income level there is a marriage penalty.
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Old 04-07-2014, 10:33 AM   #5
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I don't think the marriage penalty should be significant.

Using Taxcaster a single with $150k of income and standard deduction and exemption would pay $32k in federal taxes and a single with $70k of income and standard deduction and exemption would pay $11k in federal taxes for a total of $43k in taxes.

Using Taxcaster a couple filing jointly with $220k if income and standard deduction and exemption would pay $43k in federal taxes.

But as others have suggested, there is insufficient info in the OP to tell.

Edited to add: Did same calcs with moneychimp's tax calculator and it suggested ~$1k more in tax.
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Old 04-07-2014, 10:34 AM   #6
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Married filling jointly only doubles your standard deduction from $6100 to $12200. I assume you do itemize ? Without knowing more it is hard to determine if you are paying more than you should. From tax returns I see, most people miss the sales tax credit in states that have no income tax, along with ad valorum taxes. I would also assume you are being hit with AMT but again, not enough information.
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Old 04-07-2014, 10:48 AM   #7
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Yes, you owe more because the married tax rate brackets are not double the single brackets. Even though the rate for married is less you enter the 28% bracket sooner.

Single 28% starts at 90,000, married 28% starts at $154,700 (not $180,000 double single)

Based on the income numbers you provided less standard and personal exemptions, I calculate you pay an additional tax of $3,644 being married versus single.

Welcome to the marriage penalty.
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Old 04-07-2014, 10:53 AM   #8
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You need to compare actual taxes paid, not just the refund. That's like comparing the cost of two items by how much change you get back, regardless of whether you gave the cashier a $10 or a $20.

Then break it down, compare to last years. Not sure why you would think married would be better tax-wise, ever hear of the 'marriage penalty'?


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Old 04-07-2014, 10:54 AM   #9
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Before marriage, your wife's salary was in the 15 percent bracket. Now, all of that salary is added to yours, and is taxed at much higher brackets.

Who did your taxes this year?
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Old 04-07-2014, 07:24 PM   #10
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I did my taxes through turbo tax mainly because it pulls in all my fidelity information. I would not say that I know what I am doing I just follow the automated prompts and enter in the information.
Clearly I can't even provide enough information to help explain the difference.
Is there a good website to unseat an basic tax principals? I don't even really know where to start.
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Old 04-07-2014, 07:33 PM   #11
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Start by reading IRS Publication 17. It is really good and easy to read. As a citizen of the USA, it is your civic duty to be aware of how you are really taxed.
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Old 04-07-2014, 07:49 PM   #12
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I did my taxes through turbo tax mainly because it pulls in all my fidelity information. I would not say that I know what I am doing I just follow the automated prompts and enter in the information.
Clearly I can't even provide enough information to help explain the difference.
Is there a good website to unseat an basic tax principals? I don't even really know where to start.
Start with the total amount due: line 61 of form 1040. Then look at the amount paid line 72. Add them for the 2012 between your two returns, and then compare. You should expect the tax on your wifes income to increase since it will all be in a higher bracket than before.
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Old 04-07-2014, 07:53 PM   #13
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Some more info...

Your situation reminds me of one year when I had a lot more self-employed income than previous. I owed what I thought was a lot. Then my tax guy also clued me in that my wife's withholding was very low. For several years I had been increasing my estimated payments as she had been increasing her exemptions as out family grew. She was quite happy as her take home pay just got better each year.

It's very normal to have a large surprise when your taxes are due in April. You may have gotten it all correct, and just owe more due to marriage penalty. But you could have entered info incorrectly, or forgot to answer a question. In any event, you can check things when time permits, and amend the return if it is necessary.
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