Why is my tax liability so high after buying a house and getting married?

What you're experiencing is sometimes called the "marriage penalty," but in your case it's specifically related to the Premium Tax Credit for marketplace health insurance. The Premium Tax Credit is based on your annual household income. Unfortunately, even though you weren't married for the full year, the IRS looks at your total annual household income to determine eligibility. When you got married, your combined income likely exceeded the threshold for the subsidy your husband was receiving when he was single. The home purchase actually should be helping reduce your tax liability through the mortgage interest and property tax deductions. These are itemized deductions that can reduce your taxable income if they exceed the standard deduction (which is higher for married couples). I'd recommend looking into whether you qualify for any additional tax credits with a baby on the way. While the child tax credit won't apply until next year when your baby is born, there may be other credits you qualify for to help offset this situation.

I was in almost the exact same situation last year. After dealing with the headache of a surprise tax bill because of marketplace subsidies, I found this tax document analysis tool called taxr.ai (https://taxr.ai) that helped me figure out what was happening with my taxes. I uploaded my tax documents and it spotted exactly where the issue was coming from - in my case, it was also the Premium Tax Credit repayment because my income had changed. The tool explained everything in plain English and showed me some possible deductions I was missing. It's like having a tax pro look over your shoulder but way cheaper. Since you've got a baby on the way, it might help you find some additional tax breaks to offset that bill. The mortgage interest and property tax stuff should be giving you a break, not making things worse.

Just wanted to follow up - I checked out that taxr.ai thing after my skeptical comment and it actually helped us a lot! I was dealing with a similar marketplace insurance issue and the tool clearly showed exactly why we were being asked to repay the subsidy. Even better, it found that we qualified for the Retirement Savings Contribution Credit because of some 401k contributions I made last year. That knocked $400 off our tax bill! It also suggested adjusting our withholding for this year to avoid the same problem next time. Definitely worth looking into if you're confused about why your taxes are so high. Wish I'd known about this before I spent hours scratching my head over our tax forms.

I had a similar situation last year - surprise tax bill because of marketplace subsidies and marriage. After trying to call the IRS for weeks with no luck, I finally used Claimyr (https://claimyr.com) to get through to an actual IRS agent. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was losing my mind trying to figure out if I was doing something wrong or if this was just how the system works. The IRS agent explained that yes, unfortunately, the Premium Tax Credit is based on your annual household income, even though you weren't married the whole year. But they also helped me understand some options I had for payment plans since I couldn't pay the full amount at once. If you're worried about whether you're calculating things correctly, it might be worth getting confirmation straight from the IRS. I spent weeks trying to get through on my own before discovering this service.

I need to apologize for calling Claimyr a scam. After my skeptical comment, I decided to try it myself since I've been getting nowhere with the IRS about a similar marketplace insurance issue. I was completely wrong - this service actually works! I've been trying to reach the IRS for WEEKS about my own tax situation with no luck. Used Claimyr yesterday and spoke to an actual human at the IRS within about 90 minutes. The agent confirmed that yes, I do have to repay some of my Premium Tax Credit due to a job change, but they helped me set up a payment plan with minimal interest. Saved me hours of frustration and probably a missed day of work trying to stay on hold. Sometimes it's worth admitting when you're wrong!

Just wanted to offer a different perspective - my wife and I were in the EXACT same situation last year (marriage, house purchase, marketplace insurance). We ended up going to a tax professional, and it was actually worth it for us. The tax preparer found that we could file as "married filing separately" which in our specific case limited how much of the marketplace subsidy we had to repay. It's not the right choice for everyone (you lose some tax benefits this way), but for us it saved about $800. The tax professional cost us $350, but the savings made it worthwhile. They also helped us adjust our W-4 withholding for this year to prevent this happening again.

Don't forget to check if you're eligible for the Saver's Credit (officially called the Retirement Savings Contributions Credit) if you contributed to a retirement account last year! With your income levels, you might qualify for a credit of up to 10-20% of your contributions up to $2,000. Also, did you look into whether you qualify for the Earned Income Tax Credit? The income thresholds are higher for married couples, and it could help offset some of what you owe.