Question

Raphael and Martina are engaged and are planning to travel to Las Vegas during the 2018 Christmas season and get married around the end of the year. In 2018 Julio expects to earn $60,200 and Martina expects to earn $24,500. Their employers have deducted the appropriate amount of withholding from their paychecks throughout the year. Neither Julio nor Martina has any itemized deductions. They are trying to decide whether they should get married on December 31, 2018, or on January 1, 2019. What do you recommend? Use the appropriate tax tables

Answer 1

Answer:

The tax liability of Julio and Martina under each scenario is as follows:-

	Single Returns		Joint Return
	Martina	Julio
Adjusted Gross Income	$      24,500	$       60,200	$        84,700
Standard deduction	12,000	12,000	24,000
Personal exemption	-	-	-
Taxable income	12,500	48,200	60,700
Tax liability	1,310	6,544	6,903

From the above, it is clear that, if Julio and Martina get married in 2018 and file a joint return, they will pay $6,903 in federal income tax. However, if they wait until January 2019, their collective tax liability in 2018 would be $7,854. Hence, it would better for tax purpose, they get married in 2018.