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Author: dbkczar Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121217  
Subject: Marriage Date: 12/14/1998 10:51 AM
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Can someone help a "newly" married and new to money management? We are both 45 , no children. How do I manage the deductions from my paycheck so I'm not giving it all to the government up front? (we clear about 90K together).
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Author: jessholl One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7136 of 121217
Subject: Re: Marriage Date: 12/14/1998 3:28 PM
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Can someone help a "newly" married and new to money management? We are both 45 , no children.
How do I manage the deductions from my paycheck so I'm not giving it all to the government up
front? (we clear about 90K together).

This question is fairly vague, you can alter your w2's at work but after you get married almost everyone pays more tax than they did before. In our office if we hear of an engaged couple we have them change their w2's immediately. That's because the government tax code includes this wonderful thing called the marriage penalty. It has to do with reducing the amount of total exemptions and raising the effective tax bracket of people who file married as opposed to single.

I'm not sure if I answered the question or not, but I hope this helps.

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Author: ZorroFool One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7137 of 121217
Subject: Re: Marriage Date: 12/14/1998 3:32 PM
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<< In our office if we hear of an engaged couple we have them change their w2's immediately. >>

What do you mean by this? Change it up or down? I got married last year, and 197 was the first time either of us had ever had to pay a dime in taxes!!! How frustrating!!! What do you normally suggest regarding withholding?

Thanks!

Zorro on, Fools!

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Author: jessholl One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7139 of 121217
Subject: Re: Marriage Date: 12/14/1998 3:44 PM
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We usually have them change them so that more taxes are withheld. I have a computer program that tells exactly how much will be withheld for the year and per paycheck depending on how much the couple is planning to make. There are a lot of variables and you have to do a rough estimate of the next years tax liability to get a truly accurate number.

One way to be safe is to set your tax withholdings on your w2's at married filing single with zero exemptions. One problem is you get hit with a large tax bite every paycheck, but if you earn above 70,000 a year jointly and are not able to itemize you most likely should do this on at a least one of the paychecks. Add in capital gains, sizable interest etc, and then you get hit with even more tax bite. I just don't like the government to get more than they need so I usually go over all the variables with my clients. I have even gone so far with some that we had single zero with extra money on top of that withheld, but they did have a sizable amount of income that did not have withholdings.

One thing a lot of people are surprised at is you can change your w2 at anytime, not just when you start a new job.

I hope this helps clarify things.

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Author: DowDanny Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7140 of 121217
Subject: Re: Marriage Date: 12/14/1998 3:45 PM
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<< In our office if we hear of an engaged couple we have them change their w2's immediately >>

Wow, I'm glad I don't work there.

Changing your W-4 should be only done by the individual. I don't want my payroll dept making choices about my withholding without consulting me. If they want to send me a note with a suggestion or warning - fine. But automatic adjustments seems just plain wrong.
I want to make decisions on electing to take more or fewer exemptions, to elect voluntary payments, etc... The instructions on the Back of the W-4 are very clear about how to make sure that married couples do not accidentally over withold (by neither taking the extra exemptions) or under withhold (by both taking the marital exemptions) - but again, this should be a choice of the individual, not the payroll dept.

My money, my choice.

- DD

PS: the w-2 is the end-of-year statement of total wages and deductions and there is nothing the employer can do to alter this, since the information is 100% factual, not elective.

PPS:

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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7207 of 121217
Subject: Re: Marriage Date: 12/15/1998 9:29 AM
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[[Can someone help a "newly" married and new to money management? We are both 45 , no
children. How do I manage the deductions from my paycheck so I'm not giving it all to the
government up front? (we clear about 90K together).]]

The first thing that you may want to do is to read my series of posts regarding the "marriage penalty" and the tax issues associated with holy matrimony. You can find those posts in the Taxes FAQ area (archives section).

If you are simply trying to determine the most appropriate amount of withholding allowances for you and your new spouse, you'll want to check out IRS Form W-4 at the IRS web site. You can download this form, and it'll help you determine the correct number of withholding allowances, based upon your income, deductions, and credits for 1999.

Without going through the computations (either via Form W-4 or using some computer program such as Turbo Tax with the planning feature), you'll just be guessing, and may guess wrong. So I would suggest that you check out Form W-4 on the IRS web site and run the numbers. That's certainly the best way for you to go as a starting point.

TMF Taxes
Roy

Want to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Be the first one on your block to own this masterpiece. There is still time available to do that tax planning (and tax saving) before the end of the year. So just click on this link (http://www.foolmart.com/market/product.asp?pfid=MF+013+I) to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on http://www.fool.com/school/taxes/taxes.htm and you'll be right at the home page. Pay special attention to the "archives" section. Check it out. Finally, if you need to get to the IRS web site, click on http://www.irs.ustreas.gov to go directly there.


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Author: bliles One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7211 of 121217
Subject: Re: Marriage Date: 12/15/1998 9:57 AM
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<< In our office if we hear of an engaged couple we have them change their w2's immediately. >>

What do you mean by this? Change it up or down? I got married last year, and 197 was the first
time either of us had ever had to pay a dime in taxes!!! How frustrating!!! What do you normally
suggest regarding withholding?


What I would do, is to fill out LAST year's tax forms like you were married last year and compare the tax you would have paid to what you actually did pay, combined. That will tell you if you need to lower your deductions to raise your withholding. Good luck.

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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7213 of 121217
Subject: Re: Marriage Date: 12/15/1998 10:01 AM
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[[What do you mean by this? Change it up or down? I got married last year, and 197 was the first
time either of us had ever had to pay a dime in taxes!!! How frustrating!!! What do you normally
suggest regarding withholding?]]

I won't speak for "jessholl" in her interpretation, but I would guess that the W-4s would be reduced.

Because of the marriage penalty, two working spouses will generally pay more in taxes than two single people in the same situation.

You can read more about the marriage penalty in my series of posts on that issue in the Taxes FAQ area (archives section). You might want to check it out for some additional reading.

TMF Taxes
Roy

Want to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Be the first one on your block to own this masterpiece. There is still time available to do that tax planning (and tax saving) before the end of the year. So just click on this link (http://www.foolmart.com/market/product.asp?pfid=MF+013+I) to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on http://www.fool.com/school/taxes/taxes.htm and you'll be right at the home page. Pay special attention to the "archives" section. Check it out. Finally, if you need to get to the IRS web site, click on http://www.irs.ustreas.gov to go directly there.


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