Our long-time tax contributor Julian Block regularly receives commentary about his posts, as well as a multitude of emails from other practitioners. Here he has compiled a list of Q&As around many of the latest tax-related issues from other practitioners and business owners.
We hope you find it informative and, as ever, feel free to add your own comments and questions to this as well. These questions have been edited and condensed for clarity and brevity.
Question. The main income sources for my husband and me are our salaries. I just began a new job that pays a good deal more. How does that affect our taxes?
Answer. Couples need to check withholding from their paychecks when a wife (or husband) starts to receive more income. Many couples belatedly discover at filing time that the federal tax rate for the first dollar of her earnings is the rate for the last dollar of his earnings. Thus, if your husband falls into a 30 percent federal and state bracket, so do you.
To avoid an expensive surprise, you and your husband should make sure that sufficient taxes are withheld to cover the tab for your combined incomes. Both of you may need to file new W-4 forms with your employers.
About Julian Block
Attorney and author Julian Block is frequently quoted in the New York Times, Wall Street Journal, and the Washington Post. He has been cited as “a leading tax professional” (New York Times), an “accomplished writer on taxes” (Wall Street Journal), and “an authority on tax planning” (Financial Planning magazine). More information about his books can be found at julianblocktaxexpert.com.