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Old 03-20-2008, 08:20 PM
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Part-time self-employment vs being claimed as a dependent?

We live in CA and this year in filing our taxes, my husband and I got slammed because we're in the highest tax bracket!

I am self-employed, but only work sporadically on various projects and earn a meager income each year (about $20K after expenses).

Question - would it be better for me to not work at all so that my husband can claim me as a dependent? Would we receive a better tax deduction?

Currently we have no children, don't own a home, and are in the highest tax bracket.

Thanks in advance for your sage advice
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Old 03-20-2008, 08:20 PM
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You know that you only pay the higher tax rate on the portion of your income above each bracket limit, not the higher rate on your entire income? Your working/not working will really not make any difference, and you file as married either way, not as a dependent.
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Old 03-20-2008, 08:22 PM
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If you are married then your husband can't claim you as a dependent. You would simply file a joint return and claim both of your incomes and both of your exemptions. The only other option you have would be married filing separate which has such a high tax rate it is seldom beneficial.
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Old 03-20-2008, 08:22 PM
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You need some deductions. Are you contributing to a retirement fund? Contributing to a charity? You may want to talk to an accountant to find out how to reduce your taxable income. Good luck.
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