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Engaged Medical Student/Fiance Employed Full Time+1099; Should we "get married" asap?

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  • Engaged Medical Student/Fiance Employed Full Time+1099; Should we "get married" asap?

    Please allow me to begin this thread by stating that I am planning to bring my financials to a licensed CPA in the next couple weeks, but I would like to get my ducks in a row first.

    Here's the situation:
    My spouse and I got engaged in September (yay!) but we're not planning to get married for a couple of years. I'm a second-year medical student and she's employed full time and does additional side work on a contractual basis. Long story short, she made about $55,000 in base pay and $25,000 as a contractor (1099). She paid around $9,000 total in taxes (state + federal withholdings) on her base salary, but she hasn't had any taxes withheld on the contract work. She has also paid about $10k in her student loan debt (all interest still at this point - she hasn't broken into the principle yet).

    I'm unemployed and have no taxable income for 2019. I paid about $56k in tuition this year (via federal loans).

    Since she has a substantial amount of untaxed income, we're considering a quick courthouse marriage before the end of the year to be able to file jointly. We fully intend to have a ceremony and party and everything later (after 3rd year ends).

    Here's my question: if we are officially married before the end of the year, does my $56k tuition payment count as a deduction if we file jointly? If yes, would that make our combined taxable income $24,000?
    Last edited by bness; 12-11-2019, 09:57 AM.

  • #2
    I'm not going to speak to timing the tying of the knot to get a tax benefit but you absolutely can't take your tuition is deduct it from your income (whether yours only or the household's income). When can be deducted, with limits, is student loan interest. See schedule 1, line 33. If single income is less than $80k or HH income is less than $165k then you can deduct the student loan interest which will lower your income you report to the IRS

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    • #3
      I do not think you can deduct the full amount of tuition paid. But her income would be taxed at more favorable rates.

      There might be some tax benefits here but make sure you are both on board with this plan. Any possible benefit would be lost and then some if you had to separate finances later.

      Good luck and do not let the financial impact cloud your judgement of probably the second most important decision of your life. (First being kids IMO)

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      • #4
        https://www.irs.gov/newsroom/tax-ben...rmation-center

        Here's all the information you need. You can't deduct $56k from your combined income. I wouldn't alter my marriage plans for tax purposes.

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        • #5
          You can buy TurboTax for like $40 and figure out in probably less than an hour nearly precisely what getting marries would save you in taxes

          It would save you some taxes for sure but probably not a shocking number. Taxes shouldn’t be the driver here

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          • #6
            Congratulations! However, if you are in MS use your head, figure out the answer on your tax question then drop it. Never make a significant decision based upon taxes.
            That is always the tail wagging the dog. You are smarter than that. Figure out the tax impacts of whatever your plans may be. Welcome to the forum.

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            • #7
              shes doing interest only payments on her debt....

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              • #8
                Doing very rough numbers in my head, you'd save around $2-3k in taxes. Mainly from better marginal rates and higher standard deduction from filing jointly. That may seem like a lot now, but not as life altering as getting married.

                edit: ran back of napkin math using standard assumptions. you'll actually save around $5k in taxes? If anyone wants to run the numbers to see if I'm close at all
                Last edited by Nysoz; 12-11-2019, 02:50 PM.

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                • #9
                  Marriage is quite a bit more than a financial decision, and there are both financial pros and cons to marriage. Call me old fashioned, but I think that one should let the relationship and level of commitment grow organically, without the influence of the possible tax savings on the process. If you screw up the relationship, the cost will be much greater in the long run.

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                  • #10
                    If you are going to get married anyway......Why not save some taxes now. Just be sure about the marriage decision.

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