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emc011075, Tax adviser
Category: Tax
Satisfied Customers: 2995
Experience:  IRS licensed Enrolled Agent and tax instructor
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I'm ***** *****. Wondering about whether getting married

Customer Question

Customer: Hi, I'm ***** *****. Wondering about whether getting married before the end of the year will help my situation or not... I had to do hardship withdrawals from my retirement this year, and expecting to pay penalties. But am also planning to get married soon, and could that help offset the penalties
JA: Thanks. Can you give me any more details about your issue?
Customer: I make $110k, and fiance does not work. Hardship withdrawals amount to about 32k
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Submitted: 1 year ago.
Category: Tax
Expert:  emc011075 replied 1 year ago.

Hi. My name is ***** ***** I will be happy to help you.

Filing jointly with a spouse may help you reduce taxable income, depending on your spouse's income and/or dependence if any, but it will not help you with the penalty. Penalty is calculated separately and is added to your tax liability after all deductions. Unless you qualify for one of the refundable credits (earned income credit, additional child tax credit, education credit) when filing jointly, getting married will not help you with the penalty.

Here's a link to an online calculator. Try it both ways, single or married with all the income and deductions:

Expert:  emc011075 replied 1 year ago.

I am checking the calculator and it seems like it will not calculate the 10% early withdrawal penalty, you will have to add it at the end. Take 10% of the distribution and deduct it from the REFUND or add it to the BALANCE DUE.

Expert:  emc011075 replied 1 year ago.

Any questions? Is there anything else I can help you with today?

Customer: replied 1 year ago.
I haven't tried the calculator yet, but will do it later. I was just looking for a quick answer to see if any benefit from filing married would offset the penalties. I know the penalties can't be reduced. Just looking to offset them.
Customer: replied 1 year ago.
In other words, if nothing else changes, am I better off in the end getting married before or after New Years?
Expert:  emc011075 replied 1 year ago.

Well it depends on your future spouse's tax situation. If you file jointly with somebody with much higher income, your own income may be taxed at higher tax rate. On the other side, if you file jointly with somebody who has very little or no income, increase standard deduction and additional exemption will reduce your own income so you will pay less taxes. Are there any dependents to consider? Is your future spouse current on her taxes? If she owes back taxes for child support or student loans, your refund may be taken to pay it off if you file jointly.

Customer: replied 1 year ago.
She is unemployed. You've answered my question. Thanks.
Expert:  emc011075 replied 1 year ago.

If she is unemployed and her unemployment is less than than 7k, filing jointly may actually benefit you because it will reduce your income a little.

Anyway if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. You find the rating bar on the top of the page – 5 stars. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.