My fiance and I are considering getting married and were wondering what type of tax bracket it would place us in after marriage. My income is $200,00 per year and his is $175K per year. What will out taxes look like if we own no home (married and then unmarried) with very few deductions and no kids?
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William Keats
I am assuming you are getting married in 2013. Based on your Adjusted Gross Income, filing jointly,
no dependents, taxable income would be $359,680, after deducting the standard deduction of $12200 and the personal exemptions (now subject to marriage penalty) of $3120. Federal Income Tax is $95007. There is also an additional .9% (.009) Medicare tax on income over $250000. In addition, you would both have Medicare tax withheld on wages of $9364 each ($18728), for total taxes of $ 114860, of which $96132 would be the balance due on the return, less whatever Federal withholding tax you show on W-2.
If filing Married-Filing-Separately the story is somewhat different: Total of all taxes on the return would be $139341. of which the balance due on the return is $120613. Married-Filing-Jointly would save you $24481 over Married-Filing Separate.
A recommendation: Both of you should contribute the maximum to your deferred compensation plans...401(k), (403(b), 457 plan. Under age of 50 you can contribute up to $17500 each. Try to do this until you have dependents. When you buy a home, you can borrow from your 401k or other plan towards a down payment. Then work back up to contributing the max to the plans.
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566 weeks ago
no dependents, taxable income would be $359,680, after deducting the standard deduction of $12200 and the personal exemptions (now subject to marriage penalty) of $3120. Federal Income Tax is $95007. There is also an additional .9% (.009) Medicare tax on income over $250000. In addition, you would both have Medicare tax withheld on wages of $9364 each ($18728), for total taxes of $ 114860, of which $96132 would be the balance due on the return, less whatever Federal withholding tax you show on W-2.
If filing Married-Filing-Separately the story is somewhat different: Total of all taxes on the return would be $139341. of which the balance due on the return is $120613. Married-Filing-Jointly would save you $24481 over Married-Filing Separate.
A recommendation: Both of you should contribute the maximum to your deferred compensation plans...401(k), (403(b), 457 plan. Under age of 50 you can contribute up to $17500 each. Try to do this until you have dependents. When you buy a home, you can borrow from your 401k or other plan towards a down payment. Then work back up to contributing the max to the plans.