Tax Status Help

MxFreedom33

MxFreedom33

PR Elite
I am a married man now as of July 2015. Years prior I had it figured out for the both of us to where we got a nice tax refund while still having a livable amount taken from our pay checks. When I got married I changed my status on my w-4 to married and claiming one and I had her do the same. Well when doing my 2015 taxes i realized had it not been for my consider amount of OT we would have owed. I'm kind of at a cross roads now on what status I should be and how many to claim. I changed ours to Married- but tax at a single rate and claim 0 cause I got nervous but now our checks are considerably lower and it hurts a bit.

Our situations are as follows .. Own a home, have one child, and both work. I average $70,000 a year gross and she averages $30,000 a year gross.. Im looking for a few opinions on what to claim and what status we should be at to not give the government a huge interest free loan while still getting a little back at the end of the year. Thanks


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Do you use Turbo Tax? My wife does our taxes and has used Turbo Tax for years.

I believe Turbo Tax lets you run different scenarios to see how changing status, dependents, etc. will change tax scenarios. It also has some statistics that shows your effective tax rate and other metrics compared to others with similar adjusted gross incomes.

Might be worth spending a bit with a tax adviser for a tax scenario evaluation. They can look at things such as your income as a W-2 employee, or self-employed, do you itemize, have a mortgage deduction, are you taking advantage of all the things you can to lower you taxes. For a W-2 employee it is not complicated, but if you run a business or have a side business, it gets more involved.
 
I always error at paying too much. I would much rather get a check back then have to pay.

I have a rental, and a second home. (motorhome) Those 2 things give me a huge shelter. I write off tools and tractors against the rental, and take depreciation on the motor home.

The problem with the current system is to save money you have to pay mucho taxo! The system is set up for everyone to keep spending money.

You should still get $1,000 for one child.
 
The child tax credit is dependent upon your combined income if you file jointly. It starts to decrease at $110,000 on a graduated basis. I am not sure how it affects filing separately.
 
Try to claim zero for each of you if you can't budget your tax liability.

Everything I've read from financial analysts say that it is smarter to budget yourself, and owe the government at the end of the year. Because they aren't paying interest on that money back to you. You're basically giving them a free loan.

And on top of that if the government has more of your money because you made a mistake on your return they're not going to come send you an irs letter that they owe you money. But they'll send that letter when you owe them.....they won't audit to pay you. They audit to take your money.


Now that type of action requires you to have significant savings account and it's almost impossible for guys like you and me to do our taxes that way. Because when you're slammed with a 5,000 tax bill it's hard to swallow. And essentially you're not missing the money (too a certain degree) by just paying it forward with a 0 claim.

If you claim 0 and just make sure your taxes are correct. Like pay the $150 to a Cpa that knows the code then you don't have to worry about owing the government and it basically forces you to get by on less because the money isn't there to spend on payday. Just make sure your taxes are correct. Turbo tax doesn't necessarily mean you aren't missing things. It's an algorithm program. There's no perfect computer program.

Really your best bet is to get a divorce on paper and move your wife's address back to her parents....or charge her rent at your address. The credits will come pouring in. Your 70,000 income really puts a damper on the freebies. (Don't do this, but know that many do, thanks assholes). The top abuse the tax code and so does the very bottom. Which leaves us in the middle hostages. Tax reform anyone ? A 10% flat tax doesn't sound to bad now huh?
 
Thanks everyone for the input. I told my wife getting married was a bad business deal LOL. Oh well us men are never right. We used to get back a ton when we were single.. Oh those were the days.. We switched to " Married but withhold at a single higher rate" on both our forms and claim one.. I'm sure we will still owe a little but hopefully not to much.. See how it works out. We get the child tax credit and claim mortgage interest and school loan interest.. That's about it.. Pay the state, pay the city I work in about $1000 and the city I live in about $1,300.... God bless America


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You can claim anything as a business but if you don't make money, only lose money, expect
an audit and the expenses being denied. Even gambling. You can lose money occasionally
but you better be making money most of the time if you're deducting expenses.

I claimed roadracing expenses, including new bike every year, for 4-5 years in the 80's.
Never had a problem even though I was in the black by only $300-$400 bucks at the end of
spending $30k-40k a year.
 
i asked my tax guy about that. Was just gonna run A class and age classes and write everything off because ill get smoked. And from what I gather it must be mostly profitable or something.....IRS doESNT appreciate you writing off from a business that's constantly in the red...??
 
Something like "the expectation that your business will make money" is in the law. Somewhere.
So you can lose money occasionally but don't be surprised if the letter comes asking for your
presence. As long as you make a profit, it's really a business. They don't decide about how stupid
you are making 0.5% on your investment.
 
I don't think mine would be mostly profitable. Most payback is 100%. And anywhere that's above that I'll surely get smoked. Haha.
 
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