Getting hitched can significantly change your tax situation. Some of the advantages include higher income limits to claim certain credits, a larger standard deduction, and the right to claim your spouse as an exemption. Being married also has several disadvantages, since your new combined income could push into a higher tax bracket. Knowing and understanding the advantages and disadvantages of filing income taxes with your spouse can help to make the transition painless.
Does a Married Couple That Makes 50k a Year Pay Taxes?
Anyone making an income above a certain amount is expected to pay taxes. A married couple making $50,000 a year falls into the 15 percent tax bracket as of 2012. It is possible to lower the combined taxable income through write-offs such as tuition, medical expenses, interest and gifts to charity, though you will have to prove all of that with receipts and payment records. It is possible to just take the standard deduction and exemption amount too, but that couple will pay more taxes than the couple willing to do a little more paperwork.
What Is the Ideal Tax Exemption on a W-4 Form for a Married Couple With No Children?
Filling out Form W-4 can be a tricky process. If you are married with only one source of income, claiming married with two allowances should cover your bill. If you both work, your partner’s income might bump you into a higher tax bracket. In this case, you should claim only one or even zero allowances to cover the excess tax. The more allowances you claim, the less your employer will withhold. If you find your employer is not withholding enough, and you still owe tax after claiming zero allowances, add a dollar amount in Line 6 on Form W-4.
Can a Married Couple Be Eligible for an Earned Income Credit?
The earned income credit (EIC) for low-to-moderate taxpayers can reduce liability and increase refund amounts. Your filing status, number of qualifying children, and income during the tax year determines your eligibility. As of the 2012, a couple with no children qualified if they were older than 25 and made $19,190. The numbers went up to $42,130 for one child, $47,162 for two, and $50,270 for three or more children. The EIC is based on a sliding scale, which rises as your income increases. The EIC isn't an option for taxpayers with investment income of more than $3,150 as of 2012, or anyone claiming the married filing separately status.
How Much Student Loan Interest Can Married Couples File?
Only a certain amount of the interest on a loan can count toward a deduction, and even that's limited by IRS rules. You have to use the loan to pay for classes at an eligible school, and your modified adjusted gross income can't be above a certain amount. If that gross income is less than $120,000, as of 2012 you can claim loan interests up to $2,500. If it's between $120,000 and $150,000, the maximum deduction phases-out, with the least amount allowed at $150,000. You can't claim anything if you made more than $150,000 or if you're using the married filing separately filing status.
Can a Married Couple File Separately on Their Taxes & Still Qualify for the Tax Credits?
Filing separately from your other half disqualifies you from claiming several family-related credits. You're ineligible for credits for education, child and dependent care, earned income and adoption expenses since the IRS considers your voluntary separation of income a sign that you don't need family-related breaks. The IRS limits the amount you can claim for the child tax, first-time homebuyer and retirement savings contribution when you file separately from your spouse.
- Forbes: Federal Income Tax Bracket for 2012
- Intuit: Form W-4 and Your Take-Home Pay
- Internal Revenue Service: Form W-4
- Internal Revenue Service: Earned Income Tax Credit
- Internal Revenue Service: Preview of 2012 EIC Income Limits
- Internal Revenue Service: Publication 970 – Student Loan Interest Deduction
- Internal Revenue Service: Publication 17 – Married Filing Separately Special Rules
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