Mary and I are engaged to be married next summer. With all the political talk about the marriage penalty, we decided to look into it, and we're confused!We both work. My annual income is approx $90K, and Mary's is approx $70K. What are we looking at in terms of taxes?My best suggestion is to get a copy of Form 1040-ES from the IRS website and work the numbers. There's not enough information in your post to tell you the tax effect of marriage, but the worksheet for the 1040-ES will tell you.We both have IRAs - Mine is a traditional, Mary's is a Roth. Can we both contribute $2000 ea? Or will we be limited with a combined $2500? If the latter, what would happen to existing accounts?Once you're married and filing a joint return, each of you can contribute $2,000 to an IRA as long as between you there's $4,000 in taxable compensation. Details are in IRS Publication 590.At a combined income of $160K, will we be subject to AMT?That depends on whether you have preference items. AMT doesn't kick in just because of your income.What strategies should we be looking at to minimize the punishment the government seems intent on imposing upon us because we want to marry?Make babies. That's where the real tax savings are nowadays. To lessen your punishment, don't pay any attention to the yammering politicians until Congress produces a bill that the President will sign.TMF ExROPhil Marti
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