Married

[AznScubaSteve]

Hi, I got married in June and shortly before the wedding, my spouse was laid off. She was trending for $100k gross earnings and I am trending $170k this year. She will get a 1099-G for next year’s filing which we would have to pay taxes on her unemployment income. Should we be filing jointly or separately? If so, what should I put in for my W-4?

[Corrlich44]

Sorry to hear about the unfortunate timing of the lay off after getting married. It would never be best to file as Married Filing Separate due to the impact the Standard or Itemized Deductions may have on taxation. Unless your wife is not withholding any Federal or State tax on her unemployment benefits, which would not be prudent for the Federal return because it is taxable income, there usually isn't much you can do on the W-4 other than to file as Married Filing Joint, which may withhold less tax to some degree. It is not and exact science, since it was the Treasury Department's intent to not let the public withhold less Federal tax based on their tier of income. Her less income will automatically bring you down in your tax bracket and may be witholding less tax as a consequence.

[AznScubaSteve]

Got it, thank you! So keep my W-4 as-is (0) and then file jointly for 2022, claim her 1099-G income and pay her unemployment taxable income from any refunds I may get, right? I usually get quite a bit of money back from my own withholdings.

[Corrlich44]

Yes

[AznScubaSteve]

Thank you very much!