Married, owning two homes, file as HOH?

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doublemcdmd
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Married, owning two homes, file as HOH?

Post by doublemcdmd » Thu Sep 07, 2017 1:39 am

Hello, first post here. Really have been enjoying getting the advice so far!

My wife and I are both in medicine. I finished residency two years ago and my wife just finished up. Have been doing the taxes myself for the past few years and am just now realizing that we are due to pay significantly more in taxes because we of the marriage tax penalty. In total, it looks like we might owe 40K more in taxes just for being married, OUCH!

Im wondering if it might make sense for us to each file as head of household . . . currently have 2 kids with another on the way so we could split the dependents. We also have two homes that we rent out in addition to our main home. Can you have one of us claim one household and the other claim the household that we rent out so we each get the HOH status??

mnnice
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Re: Married, owning two homes, file as HOH?

Post by mnnice » Thu Sep 07, 2017 7:13 am

It might make sense but it is not available if you remain married :wink:

tomd37
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Re: Married, owning two homes, file as HOH?

Post by tomd37 » Thu Sep 07, 2017 7:14 am

It is my understanding that as a married couple living together your only filing status choices are married filing jointly (MFJ) and married filing separately (MFS). I think if you look at pages 20 - 24 of IRS Publication 17 you will see that you do not qualify for MFS filing status and probably would pay more taxes if you could and did use that filing status. Let's see what others have to say. Pub 17 can be viewed online at www.irs.gov.
Tom D.

pshonore
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Re: Married, owning two homes, file as HOH?

Post by pshonore » Thu Sep 07, 2017 7:32 am

Even if it were just two people living together with dependents, it would be very difficult for both to claim HOH status unless they are truly maintaining two separate households.

bloom2708
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Re: Married, owning two homes, file as HOH?

Post by bloom2708 » Thu Sep 07, 2017 8:50 am

I think you need to do some additional research.

You likely owe more taxes because your incomes are substantially higher and you are pushing into the higher tax brackets.

Each year I check to see if Married Filing Separately would help our taxes. It doesn't. Each of the past X years, MFS would result in paying more taxes.

Are your itemized deductions above the standard deduction? Maxing out pre-tax retirement vehicles will reduce your top line income. Charitable donations.

Also, make sure both your W-4 are current and you will probably need extra withholding each pay period. There is a calculator you can go through to help you align your exemptions.

More than likely you will be paying a lot of tax being in medicine and having big salaries. The way of the world. Good luck!
"We are here not to please but to provoke thoughtfulness" Unknown Boglehead

clemrick
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Re: Married, owning two homes, file as HOH?

Post by clemrick » Thu Sep 07, 2017 9:44 am

In order to qualify for 2 HOH households, you, your wife, and one child each, cannot LIVE TOGETHER for last six months of the year. So too late this year. If the difference in taxes is really $40K, then you have a lot of income and complexity in your returns. Very easy to make a mistake and get audited for something other than HOH and have your whole fraudulent scheme fall down on you and your family. This is more than "gaming the system." This is fraud and could have very serious consequences .

doublemcdmd
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Re: Married, owning two homes, file as HOH?

Post by doublemcdmd » Thu Sep 07, 2017 10:03 am

I see... I guess we were thinking that yes, we are screwed for this year but going forward, how do we save ourselves the taxes (other than getting a divorce). We are both high income earners but have pretty straightforward taxes other than the rental income. Currently maxing out our retirement accounts as well.

[OT comment removed by admin LadyGeek]

Rupert
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Re: Married, owning two homes, file as HOH?

Post by Rupert » Thu Sep 07, 2017 10:05 am

doublemcdmd wrote:
Thu Sep 07, 2017 10:03 am
I see... I guess we were thinking that yes, we are screwed for this year but going forward, how do we save ourselves the taxes (other than getting a divorce). We are both high income earners but have pretty straightforward taxes other than the rental income. Currently maxing out our retirement accounts as well.

[OT comment removed by admin LadyGeek]
Oh my god, that is fraud that you just admitted contemplating on a public website on the Internet. Stop it already. This site does not permit discussing illegal activities. It violates forum rules.

doublemcdmd
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Re: Married, owning two homes, file as HOH?

Post by doublemcdmd » Thu Sep 07, 2017 10:06 am

bloom2708 wrote:
Thu Sep 07, 2017 8:50 am
You likely owe more taxes because your incomes are substantially higher and you are pushing into the higher tax brackets.

More than likely you will be paying a lot of tax being in medicine and having big salaries. The way of the world. Good luck!
I guess what doesnt seem fair is if we were not married and living together, we wouldnt have to pay extra in taxes. Does that make sense? It just feels like we are being either punished for being married or punished for being doctors.

Rupert
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Re: Married, owning two homes, file as HOH?

Post by Rupert » Thu Sep 07, 2017 10:08 am

doublemcdmd wrote:
Thu Sep 07, 2017 10:06 am
bloom2708 wrote:
Thu Sep 07, 2017 8:50 am
You likely owe more taxes because your incomes are substantially higher and you are pushing into the higher tax brackets.

More than likely you will be paying a lot of tax being in medicine and having big salaries. The way of the world. Good luck!
I guess what doesnt seem fair is if we were not married and living together, we wouldnt have to pay extra in taxes. Does that make sense? It just feels like we are being either punished for being married or punished for being doctors.
You're not being punished. You're being required to pay your taxes as required by law. The same rules apply to everybody. Man, you need some perspective. The money has already turned you.

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Re: Married, owning two homes, file as HOH?

Post by fabdog » Thu Sep 07, 2017 10:09 am

doublemcdmd wrote:
Thu Sep 07, 2017 10:03 am
I see... I guess we were thinking that yes, we are screwed for this year but going forward, how do we save ourselves the taxes (other than getting a divorce). We are both high income earners but have pretty straightforward taxes other than the rental income. Currently maxing out our retirement accounts as well.

[OT comment removed by admin LadyGeek]
Yes, it would be illegal. How would they know? If you get audited, someone reports you, you get divorced and your ex reports you

The "considered unmarried" provisions for HOH are designed for folks who have split so the person on their own with the dependents can get the benefit.
Cannot have lived together for 6 months... not even an overnite visit.

You have the "problem" a lot of folks wish for... two great incomes. Look at the suggestions above on itemized deductions, max retirement/HSA. Maybe see a tax pro to talk about legal means to minimize your taxes

Mike

clemrick
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Re: Married, owning two homes, file as HOH?

Post by clemrick » Thu Sep 07, 2017 10:12 am

Taxes are not punishment. They help with the cost of running a country that allows you the ability to earn so much. Do you drive on roads? Do you prescribe medications and use medical procedures developed with the help of government grants? Where do you think that money comes from?

fabdog
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Re: Married, owning two homes, file as HOH?

Post by fabdog » Thu Sep 07, 2017 10:13 am

doublemcdmd wrote:
Thu Sep 07, 2017 10:06 am
bloom2708 wrote:
Thu Sep 07, 2017 8:50 am
You likely owe more taxes because your incomes are substantially higher and you are pushing into the higher tax brackets.

More than likely you will be paying a lot of tax being in medicine and having big salaries. The way of the world. Good luck!
I guess what doesnt seem fair is if we were not married and living together, we wouldnt have to pay extra in taxes. Does that make sense? It just feels like we are being either punished for being married or punished for being doctors.
There are many folks who would gladly sign up for your "problem" as well as your "punishment" Agree with other poster that you may wish to step back and re think.

Mike

Raabe34
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Re: Married, owning two homes, file as HOH?

Post by Raabe34 » Thu Sep 07, 2017 10:21 am

At that level, pay for someone to do it professionally. You don't truly know what you're overlooking and you've got a lot at stake it appears.

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BL
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Re: Married, owning two homes, file as HOH?

Post by BL » Thu Sep 07, 2017 10:23 am

See a tax CPA.
Invest in real estate.
Do taxes both ways.Mfs, Mfj
Be grateful.

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CAsage
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Re: Married, owning two homes, file as HOH?

Post by CAsage » Thu Sep 07, 2017 10:26 am

doublemcdmd wrote:
Thu Sep 07, 2017 10:06 am


I guess what doesnt seem fair is if we were not married and living together, we wouldnt have to pay extra in taxes. Does that make sense? It just feels like we are being either punished for being married or punished for being doctors.
Wow, massive entitlement here. You are not being punished. You keep more of your money at top income brackets than you pay in taxes, and there are lots of other benefits to being married that you will/do enjoy. Feel free to quit your job to save taxes - does that make sense?
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.

ved
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Re: Married, owning two homes, file as HOH?

Post by ved » Thu Sep 07, 2017 10:33 am

doublemcdmd wrote:
Thu Sep 07, 2017 10:06 am
bloom2708 wrote:
Thu Sep 07, 2017 8:50 am
You likely owe more taxes because your incomes are substantially higher and you are pushing into the higher tax brackets.

More than likely you will be paying a lot of tax being in medicine and having big salaries. The way of the world. Good luck!
I guess what doesnt seem fair is if we were not married and living together, we wouldnt have to pay extra in taxes. Does that make sense? It just feels like we are being either punished for being married or punished for being doctors.
It might not seem fair...but it is what it is.
There are other aspects of taxes might not seem fair - earned income is taxed (generally) at a higher rate than investment income, coming to my mind now.

It is fair to look at (legal) ways to minimize your taxes, not to avoid them by illegal means.

But, there's a simple way to not pay all those taxes - don't make so much, or donate a chink of it to your favorite charities.

doublemcdmd
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Re: Married, owning two homes, file as HOH?

Post by doublemcdmd » Thu Sep 07, 2017 10:36 am

Rupert wrote:
Thu Sep 07, 2017 10:05 am
doublemcdmd wrote:
Thu Sep 07, 2017 10:03 am
I see... I guess we were thinking that yes, we are screwed for this year but going forward, how do we save ourselves the taxes (other than getting a divorce). We are both high income earners but have pretty straightforward taxes other than the rental income. Currently maxing out our retirement accounts as well.

[OT comment removed by admin LadyGeek]
Oh my god, that is fraud that you just admitted contemplating on a public website on the Internet. Stop it already. This site does not permit discussing illegal activities. It violates forum rules.
Would getting a divorce and still living together be considered fraud? Im sorry I did not realize that the above was illegal

doublemcdmd
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Re: Married, owning two homes, file as HOH?

Post by doublemcdmd » Thu Sep 07, 2017 10:41 am

CAsage wrote:
Thu Sep 07, 2017 10:26 am
doublemcdmd wrote:
Thu Sep 07, 2017 10:06 am


I guess what doesnt seem fair is if we were not married and living together, we wouldnt have to pay extra in taxes. Does that make sense? It just feels like we are being either punished for being married or punished for being doctors.
Wow, massive entitlement here. You are not being punished. You keep more of your money at top income brackets than you pay in taxes, and there are lots of other benefits to being married that you will/do enjoy. Feel free to quit your job to save taxes - does that make sense?
We have a few other dual physician couple friends who elected not to legally get married... now I understand why...
I guess the frustration comes in where, if Im working and pulling a few extra shifts here and there to save money, really Im only getting half of it at a certain point and I might as well not be doing that which is a shame. If I wasnt legally married, we wouldnt have that problem as much.

I guess I will have a CPA look things over officially but the more I look into it, the more it seems "that's just the way it is"...

tomd37
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Re: Married, owning two homes, file as HOH?

Post by tomd37 » Thu Sep 07, 2017 10:43 am

OP Doc - You really need to take a look at the "Special Rules" for MFS filing status shown on page 22 of IRS Pub 17. I can think of nothing worse than getting into trouble with the IRS as a result of a self-inflicted digital exam! :thumbsup This is a "proper" site and does not contain other more descriptive emoticons.
Tom D.

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Re: Married, owning two homes, file as HOH?

Post by Dottie57 » Thu Sep 07, 2017 10:56 am

There are a lot of inequities in life. I am single and never had children. I pay taxes for schools which don't directly benefit me. My tax rate is much higher than a married person with same salary. The 15% tax limit is around 37k. Very little room for roth conversions.

Everyone has complaints about taxes from their own viewpoint. You pay high taxes because you make a LOT of money.

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Re: Married, owning two homes, file as HOH?

Post by BolderBoy » Thu Sep 07, 2017 11:00 am

doublemcdmd wrote:
Thu Sep 07, 2017 10:36 am
Would getting a divorce and still living together be considered fraud?
If the reason for the divorce is to evade taxes, yes - that is illegal as well (was quite the rave in the early 1980s when the marriage penalty was really severe! One couple went on TV to explain how they divorced every Dec 31 and remarried every Jan 1 (in a foreign country) and didn't hide their identities. The IRS effectively bankrupted them.)

Time to chill. You make lots of money. You'll still meet your ultimate goals way ahead of most people, so step back and do it legally. Slow-and-steady wins the race.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

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Re: Married, owning two homes, file as HOH?

Post by niceguy7376 » Thu Sep 07, 2017 11:03 am

Could you see how you filled each of your W2s to your respective employers?
Maybe both of you are claiming the kids in the W2 calculation

How are you doing your rental home and the other home (or are they both the same?)

At a high income level, if the rental property income flows through your individual tax return and not a LLC, there might be limitations on deductions you can take.
Last edited by niceguy7376 on Thu Sep 07, 2017 11:06 am, edited 1 time in total.

doublemcdmd
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Re: Married, owning two homes, file as HOH?

Post by doublemcdmd » Thu Sep 07, 2017 11:04 am

Dottie57 wrote:
Thu Sep 07, 2017 10:56 am
There are a lot of inequities in life. I am single and never had children. I pay taxes for schools which don't directly benefit me. My tax rate is much higher than a married person with same salary. The 15% tax limit is around 37k. Very little room for roth conversions.

Everyone has complaints about taxes from their own viewpoint. You pay high taxes because you make a LOT of money.
This is true and I really dont mind paying taxes in general, not even high taxes. What bothers me is that our taxes are even HIGHER because we are married...

niceguy7376
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Re: Married, owning two homes, file as HOH?

Post by niceguy7376 » Thu Sep 07, 2017 11:14 am

doublemcdmd wrote:
Thu Sep 07, 2017 11:04 am
This is true and I really dont mind paying taxes in general, not even high taxes. What bothers me is that our taxes are even HIGHER because we are married...
Can you quote some numbers?

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Re: Married, owning two homes, file as HOH?

Post by bloom2708 » Thu Sep 07, 2017 11:19 am

doublemcdmd wrote:
Thu Sep 07, 2017 11:04 am

This is true and I really dont mind paying taxes in general, not even high taxes. What bothers me is that our taxes are even HIGHER because we are married...
I don't really see how this is possible. Are you mixing the higher income with the fact that you got married? If you are both claiming a high number of exemptions on your W-4, you could have landed in a too little withheld scenario, but I continue to think you need to do some more research before jumping to conclusion that marriage (alone) is the cause for paying more tax.
"We are here not to please but to provoke thoughtfulness" Unknown Boglehead

kaneohe
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Re: Married, owning two homes, file as HOH?

Post by kaneohe » Thu Sep 07, 2017 11:29 am

I think it is true. Some numbers assuming no kids/std deduction.
Each earns 100K MFJ 37K taxes Single x 2 = 36K
Each earns 200K MFJ 104K taxes Single x 2 = 92K
Each earns 300K MFJ 181K taxes Single x 2 =161K

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Re: Married, owning two homes, file as HOH?

Post by bsteiner » Thu Sep 07, 2017 11:47 am

doublemcdmd wrote:
Thu Sep 07, 2017 11:04 am
... I really dont mind paying taxes in general, not even high taxes. What bothers me is that our taxes are even HIGHER because we are married...
Marrying would have reduced your taxes if one earned much more than the other.

It's impossible to solve both of these issues. Current law is generally favorable to married couples where one earns much more than the other, but is generally unfavorable to married couples where they earn about the same. Ameliorating one makes the other worse.

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Re: Married, owning two homes, file as HOH?

Post by pshonore » Thu Sep 07, 2017 12:19 pm

niceguy7376 wrote:
Thu Sep 07, 2017 11:03 am
Could you see how you filled each of your W2s to your respective employers?
Maybe both of you are claiming the kids in the W2 calculation

How are you doing your rental home and the other home (or are they both the same?)

At a high income level, if the rental property income flows through your individual tax return and not a LLC, there might be limitations on deductions you can take.
Rental property income usually flows through your personal return even with an LLC. Perhaps not if you form an C-Corp, but that's another whole set of problems and tax complexity.

pshonore
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Re: Married, owning two homes, file as HOH?

Post by pshonore » Thu Sep 07, 2017 12:24 pm

clemrick wrote:
Thu Sep 07, 2017 9:44 am
In order to qualify for 2 HOH households, you, your wife, and one child each, cannot LIVE TOGETHER for last six months of the year. So too late this year. If the difference in taxes is really $40K, then you have a lot of income and complexity in your returns. Very easy to make a mistake and get audited for something other than HOH and have your whole fraudulent scheme fall down on you and your family. This is more than "gaming the system." This is fraud and could have very serious consequences .
I believe in that situation, that would allow one of the parties to file as HOH, but the other would still be required to file MFS. And both would have use the same deduction "method" either both itemize or both take the reduced standard deduction for their status.

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greg24
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Re: Married, owning two homes, file as HOH?

Post by greg24 » Thu Sep 07, 2017 12:33 pm

The most effective way to reduce your taxes is to quit your job and get divorced.

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Re: Married, owning two homes, file as HOH?

Post by Dottie57 » Thu Sep 07, 2017 1:15 pm

greg24 wrote:
Thu Sep 07, 2017 12:33 pm
The most effective way to reduce your taxes is to quit your job and get divorced.
Giving to charity works too!

new2bogle
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Re: Married, owning two homes, file as HOH?

Post by new2bogle » Thu Sep 07, 2017 1:30 pm

OP, no one is forcing you to be married. If you feel there is a tax penalty for being married, simply become unmarried. That will solve your tax penalty problem.

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Re: Married, owning two homes, file as HOH?

Post by The Wizard » Thu Sep 07, 2017 1:34 pm

new2bogle wrote:
Thu Sep 07, 2017 1:30 pm
OP, no one is forcing you to be married. If you feel there is a tax penalty for being married, simply become unmarried. That will solve your tax penalty problem.
Right.
There is nothing fraudulent about living together as an unmarried couple, so long as you don't divorce and remarry every so often...
Attempted new signature...

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Re: Married, owning two homes, file as HOH?

Post by new2bogle » Thu Sep 07, 2017 1:39 pm

The Wizard wrote:
Thu Sep 07, 2017 1:34 pm
new2bogle wrote:
Thu Sep 07, 2017 1:30 pm
OP, no one is forcing you to be married. If you feel there is a tax penalty for being married, simply become unmarried. That will solve your tax penalty problem.
Right.
There is nothing fraudulent about living together as an unmarried couple, so long as you don't divorce and remarry every so often...
It is fraud to divorce and remarry often? (or is the humor part of my brain not working today?)

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Re: Married, owning two homes, file as HOH?

Post by mnnice » Thu Sep 07, 2017 1:42 pm

doublemcdmd wrote:
Thu Sep 07, 2017 11:04 am
Dottie57 wrote:
Thu Sep 07, 2017 10:56 am
There are a lot of inequities in life. I am single and never had children. I pay taxes for schools which don't directly benefit me. My tax rate is much higher than a married person with same salary. The 15% tax limit is around 37k. Very little room for roth conversions.

Everyone has complaints about taxes from their own viewpoint. You pay high taxes because you make a LOT of money.
This is true and I really dont mind paying taxes in general, not even high taxes. What bothers me is that our taxes are even HIGHER because we are married...
The marriage penalty has been around a long time. You didn't expect it as DINKS?

doublemcdmd
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Re: Married, owning two homes, file as HOH?

Post by doublemcdmd » Thu Sep 07, 2017 2:38 pm

mnnice wrote:
Thu Sep 07, 2017 1:42 pm
doublemcdmd wrote:
Thu Sep 07, 2017 11:04 am
Dottie57 wrote:
Thu Sep 07, 2017 10:56 am
There are a lot of inequities in life. I am single and never had children. I pay taxes for schools which don't directly benefit me. My tax rate is much higher than a married person with same salary. The 15% tax limit is around 37k. Very little room for roth conversions.

Everyone has complaints about taxes from their own viewpoint. You pay high taxes because you make a LOT of money.
This is true and I really dont mind paying taxes in general, not even high taxes. What bothers me is that our taxes are even HIGHER because we are married...
The marriage penalty has been around a long time. You didn't expect it as DINKS?
We have two kids so not entire DINKs but after some reflection, I do believe that everyone is right.
I had never heard of the marriage penalty so I was a little shocked by it. Im earning over 550k and she'll be earning 400k starting this month and there is room to grow for us both. Ultimately, we can afford to pay the extra tax but I previously, I had not realized there was such a thing. Thanks everyone for helping me to clarify. I suppose I wont try to defraud the government

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Re: Married, owning two homes, file as HOH?

Post by mervinj7 » Thu Sep 07, 2017 3:08 pm

If you wanted to get a quick sense of your tax situation, you can use the below calculator.
http://calc.taxpolicycenter.org/marriag ... calculator

For us, it's about $6500/year in so-called "marriage penalty". We decided to stay married anyway. Less complicated for us. One of our other friends did the math and decided $10k/year was too much of a penalty for them and thus they remain forever engaged.

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Re: Married, owning two homes, file as HOH?

Post by bsteiner » Thu Sep 07, 2017 3:27 pm

new2bogle wrote:
Thu Sep 07, 2017 1:39 pm
...
It is fraud to divorce and remarry often? ...
See David Boyter, 74 T.C. 989 (1980), https://scholar.google.com/scholar_case ... s_sdt=3,33, remanded, 668 F.2d 1382 (4th Cir. 1981), https://scholar.google.com/scholar_case ... s_sdt=3,33, and Revenue Ruling 76-255, http://www.legalbitstream.com/scripts/i ... 6b85/1/doc.

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Re: Married, owning two homes, file as HOH?

Post by LadyGeek » Thu Sep 07, 2017 3:32 pm

I want to address several comments related to tax fraud. For the record, discussions of dishonest behavior or bypassing the law are totally unacceptable.

The intent is to understand how to do this within the existing legal framework; in which case this discussion can continue.

Everything is a matter of degree. The choice of using a tax deferred account, e.g. IRA, to avoid taxes during some period of time is one extreme, managing assets to qualify for Medicaid is the other. Gifting assets to avoid taxes is somewhere in the middle. The bottom line is to work within the legal framework. Ethics is the ever present elephant in the room.

The approach is to educate members on how to do things legally. State your points in a factual manner. If the intent strays from this objective, please report the post and we'll investigate.

Update: I removed some off-topic comments relating to dishonest behavior.
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

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Re: Married, owning two homes, file as HOH?

Post by JGoneRiding » Thu Sep 07, 2017 7:46 pm

doublemcdmd wrote:
Thu Sep 07, 2017 10:36 am
Rupert wrote:
Thu Sep 07, 2017 10:05 am
doublemcdmd wrote:
Thu Sep 07, 2017 10:03 am
I see... I guess we were thinking that yes, we are screwed for this year but going forward, how do we save ourselves the taxes (other than getting a divorce). We are both high income earners but have pretty straightforward taxes other than the rental income. Currently maxing out our retirement accounts as well.

[OT comment removed by admin LadyGeek]
Oh my god, that is fraud that you just admitted contemplating on a public website on the Internet. Stop it already. This site does not permit discussing illegal activities. It violates forum rules.
Would getting a divorce and still living together be considered fraud? Im sorry I did not realize that the above was illegal

Just to note you CAN legally do that BUT you can not both claim HOH if you do. One can claim HOH and one can claim Single. The point of HOH was intended to help single mothers specifically. Personally I think it should be done away with as a tax status.

what you were suggesting as you know by now is tax fraud. It can land you in jail when done intentionally (just ask Al Capone--that is all he was found guilty of)

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Re: Married, owning two homes, file as HOH?

Post by rcjchicity » Thu Sep 07, 2017 8:11 pm

Marriage itself doesn't necessarily mean higher taxes, but dual high earners pay more. So do dual LOW earners. Check out the graph in the link below. Single earner married households making around $100,000/year are the sweet spot for the marriage bonus.

https://www.nytimes.com/interactive/201 ... .html?_r=0

rterickson
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Re: Married, owning two homes, file as HOH?

Post by rterickson » Fri Sep 08, 2017 2:54 pm

You could always look on the bright side.

In 1986 the top tax rate was 50%.
In 1981 the top tax rate was 70%.
In 1963 the top tax rate was 91%.

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FiveK
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Re: Married, owning two homes, file as HOH?

Post by FiveK » Fri Sep 08, 2017 4:25 pm

doublemcdmd wrote:
Thu Sep 07, 2017 10:41 am
...if Im working and pulling a few extra shifts here and there to save money, really Im only getting half of it at a certain point and I might as well not be doing that which is a shame.
Yes, that is something to consider when pondering the "money vs. life" question.

The actual marginal tax rate will depend on state and local taxes. Assuming no state tax, if the $400K income was for the whole year, you each put $18K into 401k plans, and have 3 children, the federal (income+SS+medicare) tax rates on the $0 to $550K income would be
Image

See Tools and calculators - Personal_finance_toolbox - Bogleheads if you would like to chart your actual situation.

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