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Subject:  Re: Filing Status Change After Marriage Date:  8/10/2004  8:26 AM
Author:  irasmilo Number:  72787 of 127549

I was recently married and my wife and I are getting the paperwork that follows in order. My employer told me to fill out an updated W4, noting the status change. My wife's employer says this is optional and my wife says she kept her status as single in her previous marriage.

My question is: do we need to refile our W4s (fed and state) and if it's not mandatory, what are the advantages/disadvantages of doing so? We will be filing as jointly married this year.

Updating your W-4 is not mandatory. Filing your federal tax return as Married Filing Jointly or Married Filing Separately is mandatory, but you know that already.

That said, you probably should rework your W-4s jointly to determine what the optimal withholding strategy will be for you as a married couple. Unfortunately, the W-4 worksheets only work well for a full year of withholding. Since each of you has roughly a half-year of earnings with taxes withheld at the single rate, what you really need to do is calculate your full-year tax liability, subtract the taxes already withheld and then determine how to best get the balance withheld from the future paychecks. This is not a trivial task. If either of you prepared your 2003 taxes using Turbotax or other retail software, there should be a planning module which can do the calculations for you.

Fortunately, recent tax law changes have removed most of the marriage "penalty" on couples where both spouses work, so you are less likely to find yourselves owing a lot next April than might have been the case a few years ago.

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