Trans World Assurance Blog

How Your Taxes Change After Marriage

Posted on Mon, Aug 06, 2012

Once you get married, you can choose to file jointly or separately. For many married couples, filing jointly has a significant positive impact on their finances. Some couples choose to get married sooner rather than later to take advantage of tax breaks. A few are better off filing separately. Depending on your situation, getting married can help you pay less in taxes in the long run and should be discussed with a tax professional.

Filing jointly when one spouse makes significantly more money than the other can be a huge advantage. When filing jointly, the standard deduction doubles. If the standard deduction is $5,000 for an individual taxpayer, the standard deduction is $10,000 for married filing jointly. If one spouse earned $50,000 for the year and the other earned $2,000 for the year, it's almost as if each spouse is earning $26,000. A $10,000 deduction is taken out despite the fact that one spouse earns more money.  If they filed separately, most of the standard deduction for the spouse who earned $2,000 wouldn't be used.

There is a possibility of a marriage penalty depending on your income situation. Due to the doubling of the standard deduction and adjustments in the tax brackets, most couples don't have to worry about this. These adjustments were enacted to minimize such penalties. However, those who have much higher income are pushed into higher tax brackets that haven't been adjusted completely for two people. These couples may end up paying more in taxes filing jointly than if they filed separately.

Married couples save tax money on more than just income tax. If you're selling your home, as a married couple you will get a double tax break. If the married couple has lived in their home for at least 2 of the last 5 years of ownership, $500,000 of profit can be excluded from taxes whereas only $250,000 can be excluded for single individuals. For those who don't have homes with a large profit margin, this is negligible, but couples who are selling for a large profit can save a significant amount on taxes if they file jointly.

Some people get married looking forward to the tax benefits. Most married couples will benefit from filing jointly due to the many tax breaks available when filing jointly. The best way to pay the least amount in taxes possible is to analyze your situation thoroughly. How much would you pay if you filed jointly and how would you pay if you filed separately? Most likely, filing jointly is the best way to go, but if you're concerned because both you and your spouse have substantially high incomes, experimenting with both ways is a smart decision. As always, your personal tax situation should be discussed with a tax professional.

If you are a military member, according to the IRS, military members and their spouses may be eligible to receive free tax return preparation assistance. The IRS and U.S. Armed Forces participate in the Volunteer Income Tax Assistance program which provides free tax advice, tax preparation, return filing and other tax assistance to military members and their families.

"Military Personnel and their Families Get Free Tax Help!" page on the IRS website.

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Disclaimer

The information in this article is intended for educational purposes only. This information should not be considered tax or legal advice. Individual circumstances vary. Please seek the advice of your accountant, tax professional, and/or legal advisor for answers to specific questions and to review your individual circumstances.

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Tags: military, money saving tips, military spouse, personal finance

How to Save Money During Your Spouse's Remote Military Tour

Posted on Wed, Feb 29, 2012
Remote military tours can take a toll on the family unit, as active duty personnel prepare to spend 12 months apart from their families. If your spouse is about to leave for their remote military tour, you can save extra money during their absence by taking advantage of the monetary benefits you receive. 



Family Separation Allowance (FSA)



Family Separation Allowance (FSA) is payable to active duty personnel with dependents who serve an unaccompanied tour at a rate of $250 per month, provided they meet certain criteria. Family Separation Allowance starts to accrue the day before departure and ends the day before they are due to return home to their home station. Family Separation Allowance is paid in addition to any per diem benefits being paid, as long as conditions are met.



If you are frugal, you can bank $3000 of Family Separation Allowance over the 12 month remote tour, which can help to pay down debt. Even if you are married to another servicemember, you might still be entitled to receive Family Separation Allowance (for one, rather than both members) if you can prove that you were living together for 30 days prior to the start of the remote military tour. Once servicemembers have completed DD Form 1561 (Statement to Substantiate Payment of Family Separation Allowance) and it has been approved, they will begin to receive Family Separation Allowance. 



BAH (Basic Allowance for Housing)



Dependents that continue to live in government housing on the military installation during their spouse's remote military tour are not entitled to claim BAH. However, if you and your dependent children move out of government housing, you will be entitled to claim BAH to help cover the cost of the rent or mortgage payments. 



The amount of BAH that you receive will be based according on rank and location. If you budget your BAH well and choose to live in modest accommodation below your means, you can save the difference you receive each month from your BAH.

Not all active duty personnel head off for a remote military tour during their career, but many do. If your spouse is about to depart on a remote tour, take advantage of the financial benefits to be had by saving your Family Separation Allowance as well as the difference left from your BAH after you have paid your monthly housing costs.

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Written by,
Sophie S

Sophie S is a freelance writer from the UK residing in California. She holds a BA (Hons) in English with Sociology. She works as a freelance writer, specializing in web content on immigration, expatriate life, cat care and much more. Sophie has had over 3,500 articles published on the Yahoo! Contributor Network, other sites and for private clients.

Tags: money saving tips, military spouse, deployment, military spouses, military pay, personal finance

Can Your Marriage Survive Military Retirement?

Posted on Mon, Dec 05, 2011


Trans World Assurance Military RetirementMilitary couples go through a lot of challenges and experiences that civilian couples do not often have to face, such as periods of separation due to deployments, training exercises or temporary duty. There are a number of other unique issues that many couples have to face that can tear them apart such as combat-related injuries and psychological issues that they are left with when they return home. If you are coming up to military retirement, you and your spouse may both be breathing a sigh of relief. Finally, you have made it! Or have you? How can your marriage survive military retirement?

Choosing Where to Live
After spending 20 years or more being told where to move to by the military, making up your own minds about where to settle can be a challenge. The military will pay for one last move for you, so make sure you are both in agreement as to where you will go. Take your time to decide what would be best for you as a couple and as a family. Making quick or hasty decisions can lead to further stress later on.

The Military Retirement Ceremony
The retirement ceremony is a traditional way to mark a person's transition from active duty to civilian life, but it is not a legal requirement. Some choose to slip away quietly with a small family gathering to celebrate their new status, rather than involve their former work colleagues. Speak to your spouse about your expectations, plans and how you feel about having a retirement ceremony. If you want a retirement ceremony, that can be arranged and adapted in accordance with your personal wishes.

Open Communication
Open communication is the glue that keeps spouses together. Keep the lines of communication open as you embark on your next journey together as a couple. Do not let the stresses and strains of out-processing, moving house, adjusting to a reduction in pay and other issues stop you from communicating openly and honestly with your spouse about your fears and concerns for the present, and for what the future holds.

It is perfectly normal to be afraid of what the future may hold, especially when you have spent your whole adult life being closely supervised and instructed on how to act and conduct yourself. Now you are on your own to decide all that for yourself. But for married military retirees, they are not really on their own. They should lean on their spouses even more so than ever before to help them with their transition. Doing so will keep a couple strong.

Military retirees need to maintain stronger marriages with their spouses now than ever before, as transitioning can be very challenging and stressful. Your marriage can survive military retirement if you are supportive of each other during this time of change and transition. Lean on each other for support, communicate openly and you will find that your marriage will continue to go from strength to strength.


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Written by, Sophie S

Sophie S is a freelance writer from the UK residing in California. She holds a BA (Hons) in English with Sociology. She works as a freelance writer, specializing in web content on immigration, expatriate life, cat care and much more. Sophie has had over 3,500 articles published on the Yahoo! Contributor Network, other sites and for private clients.

Tags: military, retirement, military spouse

The Military Spouse and Deployment

Posted on Wed, Nov 30, 2011

Military Spouse

Whatever your branch of service, and if you’ve experienced, are experiencing or are about to experience the distance caused by your spouse’s deployment, this blog article is for you. In the wake of your significant other’s long-term absence, a lot is going on - both in life and in the mind. Children, if applicable, are growing and changing. Important happenings are occurring that you would love to be able to share – in person. You’re happy, sad, lonely, excited and frustrated. You may have accepted there will be no more hugs or kisses. Intimacy is definitely out the window and a good face to face conversation will be, or is now, a thing of the past.

Don’t let the ebb and flow of a deployment drag your relationship under. There are ways to combat the negativity and keep your marriage on the right path when your spouse is gone.

COMMUNICATION: Whether it’s via email, phone or letters, you have to remember to communicate. If you’re having a hard day, or week, be open and honest about it. Don’t keep things bottled up inside. Let it out! Your spouse is your best friend right now and they need to hear these things almost as badly as you need to dispel them. Leave no pressing subject unrevealed. Even if they don’t ask, please, still tell. Resentment could build if this is not taken care of properly. Everyone will deal with the distance in their own way, but communicating your life and current needs is very important.

STAY POSITIVE: Even if you don’t feel positive, act like it. The above-mentioned communication is a must, but trying to remain positive is really the key. When you get to talk to your spouse, and if nothing terribly important needs to be addressed, tell them about your day; what you did or where you went. Recall funny instances with your children or pets. Talk about friends, family or someone new and interesting you met. Keep the brave face on. It is just as important for your significant other to know you’re having a bad day as it is for them to know you’re also okay. Mastering the technique of balancing positive communication and pressing issues will be hard, but it must be done.

CARE PACKAGES: With an array of care packages to choose from on the Internet, there should be no shortage in sending these. Put your own spin on one and have fun putting it all together. Pick a date each month you want to send one out and think of how excited your spouse will be to receive it.

PUT YOURSELF IN THEIR SHOES: How would you think or feel if you were the one who had to be completely separated from family and friends? Okay, so some days your significant other isn’t the best conversationalist; they only want to discuss work and they don’t even ask about your day. They seem distant or disconnected. Or perhaps they’re even a bit clingy. Either way, take a frustrated step back and try to imagine how you might be handling the distance from their perspective.

REMEMBER, YOU LOVE EACH OTHER: Don’t forget, there is a reason you both are doing this. There is a reason you both signed on. You knew your love had no bounds and that no amount of distance or time could ever truly separate you. Is this one of the hardest things you’ve ever done? Yes, it is. Does the distance and longevity test you mentally on a daily basis? Of course it does. But of all the things listed, this one is the most important. Because no matter how hard or vexing this has been, you must always remember you love each other.


Written by Sarah Shepherd
Sarah is a proud Navy wife and stay at home mom. She enjoys writing freelance articles in her spare time and composes writings on a variety of subjects.

Tags: Trans World Assurance, military move, military spouse, deployment