Here it is, to begin with, a new profile, since I prefer to blend in. I expect to make close to $400K this year. After dating for a while, I’m prepared to pop the question to my partner. We’ve been debating whether or not to tie the knot. We live in Pennsylvania and are both in our 30s, and I’m wondering if we should get married before the end of the year or tax season given our combined income of $80,000. What advantages exist? In what way does this impact my tax bracket? Seeking feedback on anything and anything, including marriage, of course
Get married for reasons other than taxes!
Having said that, being married will result in a significantly smaller tax burden. Married filing jointly (480k) will dramatically differ from single filing (400k & 80k).
Remember that getting divorced after a few years will cost far more than the money you save. Thus, get married when you’re ready, but not earlier. However, you should be encouraged by the fact that there are tax benefits to marriage in your circumstances. Getting married often has negative tax repercussions if you are itemizing and have equivalent incomes.
Keep the tax tail from wagging the dog.
However, if the question is whether to get married in December or January…
You should save taxes as a married couple using a tax calculator because your incomes fluctuate by a reasonable amount. You would each owe roughly $99k if you were single. Just $89k, married.
I made $300k and $80k from this. You might even save more with $400k. It is unlikely that the $20k in student loan savings from filing separately will offset the tax benefits from filing jointly.
I’m grateful that you provided this. We recently moved to Pennsylvania after spending the previous seven months together in New York, not sure whether it makes a difference.
Generally, your state and federal filing statuses must match, and if you are married by December 31st, you must file as such for the whole year. It would be expected that you will file a jointly filed part-year tax return in New York or, less likely, separate married filings.
Have any of you taken out student loans? Are the loans subject to an income-based payback schedule? If so, your fiancé may be more badly impacted by this. Although filing separately would still allow you to take advantage of the standard deduction.