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4now - TAX Question - Urgent Please

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  • Pasha Patel
    replied
    Thanks sappyconifer

    Leave a comment:


  • sappyconifer
    replied
    For the most part, marriage offers a greater tax break for couples, than if they were to remain single and unmarried. However, two-income families, where husband and wife earn approximately the same, may see a marriage penalty (a slightly higher tax). The rationale for this is due to the progressive way the tax rates increase, relative to earnings and that the standard deduction afforded all tax filers takes into consideration the notion that two should be able to live less expensively together than alone. As a result, the married standard deduction is less than double that of a single person (the married filing separately standard deduction is also only half of the married filing jointly).

    Recent years some tweaking of the tax code has alleviated some of the penalty for people who fall into this category. The penalty does not come into play with couples where one earns significantly more than the other.

    There are other more complex issues which can arise, with respect to IRAs etc...but that's beyond my scope.

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  • Pasha Patel
    replied
    Thanks sappyconifer...I appreciate your help... just a quick question as I never filed taxes as single in USA... I understand that lot of other factors play in tax deduction but overall how much is the difference in tax returns if you file as married rather than single ?

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  • sappyconifer
    replied
    The last day of the year is the controlling factor. On December 31st, if you are a married person you can file the year's return using married status. Likewise, if single, you can declare the entire year as single.

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  • Pasha Patel
    replied
    Hi 4now ...

    How's evrything with you? I hope you are doing fine... I have a question regarding my cousin... He is single and workiing with big company on wall street as QA analyst.... he makes around 80 K... now he is planning to marry in january 2006. She is doing PhD and gets stipend about 2400$ / month... both have been paying tax as single and head of household....

    My question is will they get any benefit in tax for this year if they marry in this year before 31st december instead of January 2006...

    Thanks in advance and please if anyone knows I will appreciate your replies...Have a good evening...Pasha

    Leave a comment:


  • Pasha Patel
    started a topic 4now - TAX Question - Urgent Please

    4now - TAX Question - Urgent Please

    Hi 4now ...

    How's evrything with you? I hope you are doing fine... I have a question regarding my cousin... He is single and workiing with big company on wall street as QA analyst.... he makes around 80 K... now he is planning to marry in january 2006. She is doing PhD and gets stipend about 2400$ / month... both have been paying tax as single and head of household....

    My question is will they get any benefit in tax for this year if they marry in this year before 31st december instead of January 2006...

    Thanks in advance and please if anyone knows I will appreciate your replies...Have a good evening...Pasha
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