bumping since it showed up in search.
I was looking into the possibility of getting married in 2016, and how that would effect taxes, my _own_ savings (would get a pre-nup for savings before marriage, after marriage income 50/50). I thought my situation might be interesting to share.
I am more or less a digital nomad with $0 rent, $0 utilities, but earning a high income. My resident state is zero income tax, zero capital gains tax. Technically I earn income in various states so file returns for the big ones as a proportion of income earned in state / total income; probably just non-resident CA in 2016. My girlfriend is a resident of CA. If we were to get (legally) married around xmas 2016 (actual ceremony presumably at some later date), it means we could file a federal joint return for 2016 and since she earns so little for 2016, I would save a lot on federal taxes. 2017 would reduce my own savings rate since I would probably become a resident of CA, begin paying some rent and bills, and of course be splitting income 50/50.
Sounds good so far (well, except the bit about not saving as much in 2017).
Napkin math, just considering income taxes with the only change as joint instead of single, is telling me it would result in an additional savings of $11,000 in 2016, for just me (though I would probably gift my new wife some amount as an explanation of why we would do this non-traditional approach to marriage but celebrating presumably at some later date).
Then I saw a little gotcha from CA tax board:
> Exception: If you file a joint tax return for federal purposes, you may file separately for California if either spouse was:
> A nonresident for the entire year and had no income from California sources during 2015.
That "and" is quite a kicker, costing me about $1500 of that $11,000. Basically free money for CA they don't deserve at all as far as I can tell.
Ultimately, $9500 is probably worth it to ensure we get hitched before 2017, all things considered. (I bet that would more than pay for a wedding ceremony or rings)
I've generally came away with the belief that marriage should not be a factor in taxes, at all. As well as detesting cliffs or big discrete jumps in (social security benefits, ACA, welfare, income) taxes (like getting married a day before the end of the year and everything is treated the same as if it were 363 days earlier). Even though it can be taken advantage of by savvy folks like us.
Just thought that might be of interest. We'll see how 2016 goes with work and the relationship. Let me know if there are some other huge benefits that should be considered for the case of a December marriage and wanting to maximize my own _individual_ savings for that year (I think that's fair).
