How does Marriage Impact Your Finances?

If you're trying to convince your man to tie the knot with you,  try presenting him with the financial benefits. It will probably be a lot easier than keeping that glazed look off of your face whenever he starts rambling about the NFL playoffs.




Learnvest, the popular women's personal finance blog, released a post today analyzing the advantages of filing your 2011 taxes as Married Filing Jointly (MFJ) versus filing as Single. Of course, if you are single with kids or other qualified dependents, you would be eligible to file as Widow(er) with Dependent Child (WD) or Head of Household (HOH) which are both better filing statuses than Single for tax purposes.

The delightfully calculator-savvy bloggers at Learnvest calculated tax rates for Single versus MFJ.

Please note that you must be married to file as Married Filing Jointly, not just engaged. However, even if you were married on December 31st, 2010, the IRS will allow you to file your taxes as MFJ for the entirety of 2010.

The article also found that the greatest tax benefits go to couples with unequal wages, while couples that are both earning in the same tax bracket get the least benefits.

The final filing status is Married Filing Separately (MFS). While you might consider filing as MFS if you are separated and unable to contact your spouse, or worried about any potential trouble your spouse might get into with the IRS, there are some big drawbacks.

Filing as MFS means you will be unable to claim certain refundable and non-refundable tax credits such as:
1. Earned Income Tax Credit
2. Child & Dependent Care Credit
3. College Tuition Deduction
4. Student Loan Interest Deduction
5. American Opportunity Tax Credit
[The first 2 credits are applicable only if you have a child or qualifying child]

If you are trying to figure out whether it would be more advantageous to file as Married Filing Jointly versus Married Filing Separately, you can input your numbers into the latest tax software and run it both ways. Just don't click 'Send' unless you have double-(or triple)-checked everything. For the a feature comparison of 2011 tax software click here.

And don't forget, if you are filing a simple return or a 1040EZ, tax software companies will let you file federal taxes online for free! (You may have to pay a small fee to file with your state depending on which state you live in).

Remember tax day this year is April 18th!