As a newlywed without much knowledge of taxes other than how to file a 1040EZ, I was wondering how some of you married folks handle yours? Jointly? Claim them as a dependent?

Specifically, my wife is out of work. She plans on attending school full-time next semester and will not be providing any income to the household. From what I can gather, but cannot confirm, it would be best if I claimed her as a dependent now and to file jointly next year. Claiming her as a dependent should give me more money each paycheck and I should see a big return next year as we would be filing jointly, making the larger deduction and she wouldn't be adding any income to the bottom line.

We also made a mistake in getting married before she filed her FAFSA application so I know that I'll probably be picking up most of her school costs (this is an assumption on my part, though). I can't afford to foot the bill even though I make a decent living. Any ideas on a way to handle my taxes and FAFSA so that we can actually afford her school and be able to to not live in a box?

I know I should probably consult with a CPA but I know some of you on here are in similar situations so I just wanted to see what to prepare myself for.

Thanks!

[ghporter]

In general, your spouse is a spouse, not a dependent. Filing jointly usually works well, but there are circumstances where it's better to file as "married, filing separately." Your best bet is to grab a copy of TurboTax (or similar product-I like TT a lot) and let it run your numbers. If it works out in your favor to file a certain way, do it-the IRS says you should file so that you pay the least tax or get the greatest refund, so it's not cheating.

Why should you "have to pick up her costs?" FAFSA is based on fairly simple and quite fair qualifications. Two dirt poor students should not be expected to be disqualified just because they got married. They're still dirt poor, right? Marriage is about a couple, not an income, and the FAFSA people know that.

[shifuimam]

I've heard rumors that your FAFSA qualifications change if you're not a dependent under a parent or legal guardian's taxes. I don't know if this is true, but I know a couple married kids from college who didn't qualify for much.

However, I don't know if they filed jointly or with the wifey as a dependent.

FWIW, my mother claimed me as a dependent when I was in college. That combined with her low income put her under the national poverty line for those years, and I got my tuition paid for almost 100% through Pell, SEOG, and SSACI (that was from the state) grants. Well, along with my scholarships.

But if she's a dependent and you make crap income, then you may be in luck. I'd recommend going that route if you can. I think filing jointly will kill your chances of getting federal needs-based funding, at least from what I've heard from others...

[Cold Warrior]

Your spouse is not your dependent. These are two different categories.

[Railroader]

Originally Posted by screamingFit 

I know that I'll probably be picking up most of her school costs (this is an assumption on my part, though). I can't afford to foot the bill even though I make a decent living. Any ideas on a way to handle my taxes and FAFSA so that we can actually afford her school and be able to to not live in a box?

Are you sure you're married?

[Eriamjh]

Originally Posted by Cold Warrior 

Your spouse is not your dependent. These are two different categories.

Bingo. Not a dependent.

You can adjust withholding and stuff to get more money in your pocket, but there is little you can do to reduce your tax burden.

Do the TT thing mentioned and file in a way that makes you pay the least. She may be eligible for a few more deductions unemployed than she can get if you file jointly.

Or the best advice yet, talk to a tax advisor. It might cost you a little and save you a lot.

[SVass]

As ghporter suggested, use TurboTax. ($30 at Costco and the CD has both the Mac & PC versions on it.) Also depending on your state of residence, your income may or may not be community property which means that half is yours and the other half is earned by your wife. The IRS does not get to vote on this. Neither does whoever you apply to for aid. Do not talk to H&R Block or one of their type of people as they are mostly temps who do not understand the law as opposed to knowing how to fill out a form. A real tax professional in your state might know. sam

Some good ideas, here. Thanks a lot for your input.

Regarding the "claim as dependent" - my bad taking a posting on some random message board out there on the internets as gospel. Think I'll bite the bullet and see if I can see a Tax Advisor!