I was talking taxes with a friend, it is April after all, and I mentioned that according to TurboTax the Help and I are paying less than 11% (something like 10.54%) of our gross income to federal taxes. Friend was impressed (yea me, sidenote, another friend says she's paying nearly 0%, which is impossible or illegal), and wondered if it was because the Help and I were married. Unsaid, up to this point in the conversation was friend wondering if it would be worth it for him and longtime gay partner to marry. Unsaid by me in the whole thing was, no, and I went to prove it.
Before the Help and I married, our pre-marriage tax rate was about 12pointsomething%, after ten-point-something. On the surface you'd think, ah ha, we got a marriage tax savings. Ah, no. I noticed two things. One, our combined gross income was less post-marriage than pre-marriage, even though we both got raises in that time. I lost income renting out my extra room, which is now our room. Retirement and other pre-tax funky paycheck stuff also did it. Prior to marriage, we weren't putting much, if anything into retirement. By being one in marriage we are trying to be purposeful about our future and our finances are combined. My gay couple friends, have been together for a couple of decades and their finances are separated, and I don't see their accounts coming together any time soon. Sometimes I'm shocked how separate they live their lives at times.
The second thing that helped lower our tax rate were deductions. We pay more in local taxes (income & property) which is about half of our deductions. The other half, charitable giving. I give to my alma maters, we give to our churches, and one church I don't attend anymore. We give to local charities. I give to random charities. I was giving to charities before getting married, the Help did the 1040EZ and really didn't give much thought to giving. The Help's alma mater, UC-3rd Circle of Hell, will probably never ever get anything from him, and since I never went there, we won't be giving. We give to the school we both attended, only because I was giving to the school anyways. They just tacked his name on is the only difference. I know our friends volunteer for the arts, but I don't know if they regularly give to any one charity. They don't attend any weekly religious (there are many, many gay churches and gay friendly spiritual houses in DC) functions and so as I know don't regularly financially support any non-profit. Knowing one half of the couple he'd probably be very unwilling to give away significant amounts of his income.
So yes, in marriage we saved money. Not because some state granted us a marriage license, that helped, but because we began living as married people, being one with each other. I heard a financial guru say that the difference between being married and shacking up is 'the conversation is different.' We have had conversations about our future, with the assumption that in 20, maybe even 30 years (we're old, we married old, one of us will be dead before making it 40 years) we will still be one. I know the conversation is different in the way I've seen others lives, between the married and the shacked up.
Note: I forgot to mention the mortgage interest deduction, which is less now than what it was when we got married. That helps too, but less so as we throw more at our mortgage. But then again, we're going to get a 2nd mortgage for the construction planned this year.
Labels: living, money