Has anyone tried adjusting their withholdings to compensate for the marriage tax situation? My husband and I discovered this "penalty" last year and ended up owing $2,700 when we'd both previously gotten refunds filing separately. We're trying to figure out if we should change our W-4s.

I went through this exact same shock when my spouse and I got married three years ago! We were both making around $70k each and suddenly went from getting decent refunds to owing money. What really helped us was understanding that the "marriage penalty" isn't actually about the government penalizing marriage - it's more about how the tax brackets are structured. The key insight for us was realizing that while we paid more in taxes the first year, we also had access to benefits we didn't have before. We could max out retirement contributions more strategically (like doing a spousal IRA), our health insurance became cheaper with family coverage, and we qualified for some tax credits we couldn't get individually. Also, don't forget that once you're married, you have the option of married filing separately if that ever works out better for your specific situation, though it rarely does. The real financial benefits of marriage often show up in areas beyond just the annual tax return - things like Social Security benefits, estate planning, and combined insurance coverage.

Slightly different perspective - you could consider making an S-Corp election effective 1/1/24 even though it's past the deadline. The IRS allows for late S-Corp elections if you have "reasonable cause." Given that you were already operating as if you were an S-Corp (paying yourself W-2 wages), you might have a case for relief under Revenue Procedure 2013-30.

I went through almost the exact same situation last year! My SMLLC had been paying me W-2 wages for three years without S-Corp election. After panicking for weeks, I ended up working with a tax attorney who helped me file for late S-Corp election under Revenue Procedure 2013-30. The key was demonstrating that I had "reasonable cause" - specifically that I was operating in good faith as if I were an S-Corp (regular payroll, proper withholdings, etc.) but simply missed the technical filing requirement. We submitted Form 2553 with a detailed explanation letter showing my payroll records and explaining the misunderstanding. The IRS approved the retroactive election back to my original intended date, which meant I didn't have to amend any returns or deal with the Schedule C conversion. The whole process took about 6 months, but it was way less painful than I expected. Definitely worth exploring before you commit to amending multiple years of returns!

Does anyone know if you need to file for a FICA refund if you're filing your annual tax return anyway? Couldn't you just claim these excess deductions on your 1040NR?

I just went through this exact same situation as an F1 STEM OPT student! One thing I'd add to the great advice already given is to make sure you keep detailed records of everything. I created a spreadsheet tracking each pay period where FICA was incorrectly withheld, along with the specific amounts for Social Security and Medicare taxes. Also, don't let your employer off the hook completely. Even though they're being uncooperative about providing documentation, they are still required by law to correct their records and stop future withholding. You might want to escalate within HR or contact their payroll department directly - sometimes different departments are more helpful. One more tip: when you file Form 843, include a cover letter clearly explaining your situation. I wrote a simple one-page letter stating I was an F1 student on STEM OPT, exempt from FICA taxes, and that my employer had incorrectly withheld these taxes. I attached copies of my I-20, EAD card, and pay stubs showing the withholding. This seemed to help the IRS process my claim more efficiently. Good luck with your refund - $4,200 is definitely worth fighting for!

One thing that might help with planning is understanding how these benefits interact with each other. You can actually stack several of these tax advantages in the same year - claim the Lifetime Learning Credit, deduct student loan interest, AND contribute to a spousal IRA all on the same return. At your $76,000 income level, you're well within the limits for all of these benefits. The Lifetime Learning Credit phases out between $82,000-$172,000 for joint filers, student loan interest deduction phases out between $155,000-$185,000, and you'd qualify for the full spousal IRA deduction. If your wife's program qualifies her as at least a half-time student, she might also be eligible to defer any existing student loan payments while in school, which could free up cash flow even if you're not getting additional tax benefits from those loans. Also worth noting - if she does any teaching or research assistant work that generates income, that could affect some of these calculations, but it might also make her eligible for her own IRA contributions. Just something to keep in mind as her academic situation evolves. The key is to track everything carefully and consider working with a tax professional for at least the first year to make sure you're maximizing all available benefits while staying compliant.

I'm in a very similar situation - my husband is in his second year of a PhD program while I work full-time. We've been filing jointly and have found some great benefits that might apply to your situation too. Beyond the education credits others have mentioned, one thing that's been really helpful is understanding how the timing of expenses affects your taxes. We've learned to be strategic about when we pay tuition - paying spring semester costs in December rather than January can help you claim credits in the current tax year, which is especially useful if you expect your income to increase. Also, if your wife ends up doing any graduate research or teaching work later in her program, those stipends are usually taxable income, but they also make her eligible for her own retirement contributions. It's something to keep in mind for future planning. The spousal IRA contribution has been a game-changer for us - being able to contribute $7,000 for my non-working spouse while getting a full tax deduction has significantly reduced our tax burden. At your income level, you should definitely qualify for the full deduction. One last tip: keep meticulous records of everything education-related. We use a dedicated folder for all tuition receipts, 1098-T forms, and any required course materials. The IRS can ask for documentation years later, and having everything organized makes tax prep much smoother each year.

I went through this nightmare last year. Found out that while 1095-B and 1095-C forms are "for information only," the 1095-A is absolutely required if you got marketplace insurance with subsidies. I ended up filing without it because I was impatient for my refund, and the IRS held my refund for nearly 3 months while they sent me letters requesting the missing information. Had to call dozens of times. Total headache. My advice: WAIT for the 1095-A no matter what. The delay in filing will be way shorter than the delay if you file incorrectly without it.

Just wanted to share my experience as someone who went through this exact situation last year. I panicked when I couldn't find my 1095-A form anywhere and the filing deadline was approaching fast. Here's what I learned: Don't file without it, period. The IRS processing systems are set up to catch missing Form 8962 (Premium Tax Credit reconciliation) and will automatically flag your return. This means delays, correspondence, and potential penalties. The key is being persistent with getting your replacement form. I had to call the marketplace multiple times, but once I got through, they were actually very helpful. They can see if your form was mailed to an old address (which happened to me after moving) and can immediately email you a corrected version. One tip that worked for me: Try calling early in the morning (like 8 AM) when the phone lines first open. I had much better luck getting through then versus calling during peak hours. Also, regarding your income being $4,000 higher than estimated - that's exactly why you need the accurate 1095-A numbers. The reconciliation calculation on Form 8962 is very precise, and estimating could result in you owing money to the IRS or missing out on credits you're entitled to. It's frustrating to wait, but trust me, doing it right the first time will save you months of headaches later.