Marriage and taxes: Surprising Changes

Back in September, I got married. My wife recently started a new job and was filling out all of the normal paperwork. She got to the W4 and asked me what she should claim. Like me, her high school finance class failed her, so she did not get a strong education on finances and things you should know. We sat down and gathered all of our pay stubs and used the IRS worksheet to see what we need to claim at every job we have. She has 5 jobs (by choice) that she carefully schedules to fit. I want to note that 3 of her jobs are gig based. She only works if there is a show or they have a work call planned. She works as an Office Admin at one job and a Manager at a movie theater. These 2 jobs are her foundation. They give her enough money to live off of, but just barely. Her freelance jobs are above and beyond for her to save, or spend as she sees fit.

Having all of these jobs, we’ve both claimed zero or one exemption(s) because we’ve been too lazy to do the paperwork to change it. But now that we are married, we started to review everything. We ran the numbers, and for the first time, we will most likely need to pay in because surprisingly, getting married makes taxes more difficult.

I am by no means an accountant or tax professional, and I will admit that I’ve used Credit Karma and Turbo Tax to do my taxes. I also know that both of those options aren’t the best and have their downside. But they both have saved me the hassle of filing myself or having to sit down and figure out taxes with a person. This was all fine and dandy when all I had was a couple of jobs in college and made maybe $15,000/year. But now, together, we have bumped up in the tax bracket. Not knowing this is might cause us to have to pay out a whopping $230. But that is an estimate before we see what Uncle Sam has in store, or we can deduct all the fun stuff.

Saving up for the wedding, I put my savings into an investment account with Vanguard so that my savings could grow quicker in the hopes that we wouldn’t have to go into debt or rely on credit cards to pay for our day. I am waiting to see what tax implications that pulling out of investments will have, but I see a bigger tax bill in my future. I also know that I should have left my investments alone because they would have grown to so much more if I let them grow for the long term. Now I’m not saying that I wasted money on the wedding. I was happy with everything we did, I just wish that weddings, as a whole, weren’t so expensive. We did have help from parents but at the end of the day, our wedding cost a little over $26,000. The help we had from family was about $9,000. Over the course of 1 year and 9 months of saving up (we took a longer engagement), we were able to meet our goal and start our marriage without a crazy amount of debt just from the wedding. We both still have student and car loans, and foolishly I have credit card debt.

We have decided to keep our money separate. My wife is a saver and doesn’t believe in being risky or investing. I believe in investing and am trying to plan my future towards an financially independent future. As most investors know, you want a healthy balance of stocks and bonds. I view our financial situation as, She is the bonds and I’m the stocks.
We also feel that keeping our finances separate keeps us from getting into arguments about money like so many couples do. As long as we can both pay our fair share of the bills, we don’t need to worry about money. We also tend to go with the flow and have discussed maybe starting a joint account to pay for mutual bills and whatnot, but seeing as we have been living together for a good chunk of our relationship, we haven’t seen the need to make any major changes to our banking situation.

I’m sure when we finally get all of our tax stuff together, we’ll have it all figured out for the next year. I just really hope that we don’t end up owing a ton at the end of this year. I already know that for future years, once I get rid of my bad debt, that I’ll be maxing out retirement and my HSA to drop that taxable income down. Once we get our tax situation figured out, we’ll be able to get our money figured out to get moving forward with a house and maybe start looking at rental properties, or bigger investments.

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