Single vs. Married filing jointly withholdings
Question on tax deductions from paychecks:
Background: I 9(23F) make 65k/yr and have NJ taxes withheld from my check, my husband (22m) earns 70k/yr and has VA taxes withheld from his check as he works remotely for a company in VA. We now live in NJ and will need to file taxes in NJ.
Me and my husband file jointly every tax year, but have our withholdings set as single because in our early days of budgeting and being married we would told it would make it easier come tax season as we’d always get a refund.
A few years ( and several pay increases) later and the difference between single and married filing jointly could now mean we’d keep more money to ourselves each paycheck, but I’m not confident enough to make the switch because I don’t know what that would look like come tax season.
We would like to make sure we make the most possible to pay off our debt faster, which is what makes me think of possibly making this change
Is there a reason why we should or should not change to married filing jointly? If we change, is there anything we should know or keep in mind?
Tysm to anyone who will take the time to help!
I am Canadian so I can’t help you with the single vs married question but in general it is not a good idea to get a tax refund. You are using the government to save money, money that you can’t access until April of the next year. I recommend making the changes that will minimize your refund (the goal is to be as close to break even as possible). If you are concerned about that not working out and then owing money, you could take the incremental extra amount per cheque and set up a category to allocate that amount. By April of the next year, you will have an amount in there that in the event you owe money, you can use it. After a year and if you have no other changes the next year, you should feel comfortable using that money as part of your regular budget.