I believe it has to do with how much you are withholding. This goes on your W-4. A lot of people recommend claiming married 1 so that you get a tax refund, but I would rather owe the gov than get a refund. So I claim married 2.
I actually withheld as married 2 while I was single and STILL got a huge refund because of my education tax credits. So think about that too.
Edit: I think the higher the number, the more you get in your paycheck. The lower the number, the more your employer withholds.
If you're good at budgeting, having more in your paycheck is a good thing because you can earn interest on it. If you're bad at budgeting or don't want the possibility of a big tax bill, then use a lower number so that your employer withholds more.
I usually plan for the government to owe me, but to owe me as little as possible. I just don't want to deal with the bill come tax time. If you're itemizing, there's another section on the back of the W-4 that most people don't pay attention to that you can fill out and figure out what your suggested withholding is.
This goes on your W-4 for your employer. The number is your number of dependents. The more dependents you claim on your W-4, the less they will withhold for taxes. Figuring that you could use more money during the year if you have more people to support. This means less of a refund, or possibly owing, when filing your taxes.
I was always told to file married 0, however I recently started a new job and one of the choices was married, but withhold at the single rate. More is taken out of my check, but I hate having to owe money.
One of the things you have to be worried about if you have side jobs etc is that your primary place of work will only take out taxes on what you owe there the same goes with your other jobs and spouses jobs. My parents always had to claim single zero and still do quarterly taxes etc because of my dad's side work and how they would always be in a higher tax bracket than what their employers were withholding.
The rule of thumb is that for every $600 to $800 you get in refund is one deduction. If you get too high of a return and claiming single zero when you are married you should try claiming married 1 or 2.
Talking with my wife, we like to maintain a decent tax return because a lot of our semi-annual and annual bills come due around March. We also have to pay quarterly city taxes because I work in a different city from where I live.
One of the things you have to be worried about if you have side jobs etc is that your primary place of work will only take out taxes on what you owe there the same goes with your other jobs and spouses jobs. My parents always had to claim single zero and still do quarterly taxes etc because of my dad's side work and how they would always be in a higher tax bracket than what their employers were withholding.
The rule of thumb is that for every $600 to $800 you get in refund is one deduction. If you get too high of a return and claiming single zero when you are married you should try claiming married 1 or 2.
Talking with my wife, we like to maintain a decent tax return because a lot of our semi-annual and annual bills come due around March. We also have to pay quarterly city taxes because I work in a different city from where I live.
This! So true. All my little side jobs are a bummer come tax time. This year, for the first time, I'm putting some aside to make up for it.
We're meeting with our tax guy today and I'm hoping he'll have good insight about what we should be withholding for the best results. Our taxable take home is about the same, so I'm concerned about this "marriage penalty" I keep hearing about, even though I just don't get why it should make a difference whether our total income is split down the middle or mostly him. I think we'll still be in the same bracket we each were when single, unless I'm missing something.
Just a note on the side jobs - on those w-4's you can ask them to withhold an additional amount each paycheck. I just got a part time job and it's paid bi-monthly. I'm just having them take out $30 each paycheck. I calculated it and with the hours I'll work, I doubt I'd make enough for them to start taking any federal taxes out.
Just a note on the side jobs - on those w-4's you can ask them to withhold an additional amount each paycheck. I just got a part time job and it's paid bi-weekly. I'm just having them take out $30 each paycheck. I calculated it and with the hours I'll work, I doubt I'd make enough for them to start taking any federal taxes out.
That's smart! I may just go with "withholding" into my own little account though. Might as well earn some interest!
with the side jobs you can also make your own estimated payments quarterly at whatever with-holding level your income fall into (I pay 25% of what I make at my side-job).
Re: Married Tax Status
The rule of thumb is that for every $600 to $800 you get in refund is one deduction. If you get too high of a return and claiming single zero when you are married you should try claiming married 1 or 2.
Talking with my wife, we like to maintain a decent tax return because a lot of our semi-annual and annual bills come due around March. We also have to pay quarterly city taxes because I work in a different city from where I live.
We're meeting with our tax guy today and I'm hoping he'll have good insight about what we should be withholding for the best results. Our taxable take home is about the same, so I'm concerned about this "marriage penalty" I keep hearing about, even though I just don't get why it should make a difference whether our total income is split down the middle or mostly him. I think we'll still be in the same bracket we each were when single, unless I'm missing something.