Don’t Let the ‘Marriage Penalty’ Scare You Away From the Altar
Question: I may be getting married in 2002, and I’m wondering about the so-called marriage penalty in the federal tax code. What is the latest word on that? Would it be wise to postpone my marriage to 2003 to avoid this penalty?
Answer: Unless your intended is extraordinarily patient, the answer is no. You’d need to postpone your wedding until at least 2005, and even that might not help.
Most of the marriage-penalty relief that was passed by Congress this summer doesn’t even begin to take effect for three years, and its full impact won’t be felt until 2009. Even then, the benefits are expected to be modest, since the law covers only some of the ways in which couples with two similar incomes get nicked by the tax code.
The good news, however, is that you may not be facing a marriage penalty at all. More married couples get a marriage bonus--favorable tax treatment because they’re married--than suffer a penalty. If you earn more than your intended, or vice versa, you probably will face a lower tax bill after the wedding than before.
The only way to know for sure how your tax situation might be affected is to do your taxes, both together and separately. Tax software such as TurboTax makes the task relatively easy, or you can ask your tax pro to do an estimate for you.
Add Credit Card Offers to Death and Taxes
Q: I called the (888) 5-OPT OUT number you listed in your column and signed up. But we still get at least one credit card offer a week from various companies. Why? What should I do now?
A: There’s nothing you can do to totally eliminate credit card solicitations. Not every credit card issuer subscribes to the opt-out service or abides by consumer wishes not to receive junk mail. Signing up for the opt-out service should reduce the number of solicitations you receive over time, but you’re still going to receive some.
You can fight back by noticing which companies persist in pelting you with junk mail, and opting not to do business with them in the future. (That might be a good idea anyway, because companies that ignore consumers’ desires in this area tend to be the ones that impose lots of fees and high interest rates.)
If you’re really ticked off, you can shred the offer in little bits and stuff it back in their pre-paid envelope. That doesn’t accomplish anything other than costing the company a few cents in postage, but it might make you feel better.
Monitoring Your Credit Carries a Price
Q: After reading your column, I decided it would be a good idea to see my credit report. I went to all three Web sites you listed and they all wanted to charge me for the privilege. This is highway robbery. Why do I have to pay to review my personal information?
A: Consumer advocates have been asking that question for years. They haven’t made much headway in persuading the credit bureaus to play along. At one time, Experian (then called TRW) did provide one free credit report each year to anyone who asked. But the other two major bureaus, Equifax and Trans Union, refused to follow suit, and Experian eventually discontinued the practice.
You can get a copy of your credit report for free if you’ve been denied credit or are the victim of credit-related fraud. A handful of states also require that credit bureaus give out free copies to their residents once a year. Those states include Colorado, Georgia, Maryland, Massachusetts, New Jersey and Vermont.
Otherwise, you’ve got to cough up the fees--usually $8 to $9 per report, although Equifax offers a service at https://www.scorepower.com where you can get your report and a look at your all-important credit score for $12.95. (Your credit score is a three-digit number that’s increasingly used in lending decisions and which, until recently, was kept secret by lenders and the credit bureaus.)
You should plan on checking your credit report at least once a year to look for errors and fraud. You don’t have to check with all three bureaus each time; just pick the one that’s headquartered closest to you, since it’s likely to have the most information about you. Experian’s customer assistance center is located in Texas, Trans Union has a Pennsylvania address and Equifax is in Georgia. You can call Experian at (800) 311-4769, Equifax at (800) 685-1111 and Trans Union at (800) 888-4213. And if you don’t like paying for your credit report, let your state lawmakers know.
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Liz Pulliam Weston is a personal finance writer for The Times and a graduate of the personal financial planning certificate program at UC Irvine. Questions can be sent to her at moneytalk@latimes.com or mailed to her in care of Money Talk, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012. She regrets that she cannot respond personally to queries. For past Money Talk questions and answers, visit The Times’ Web site at https://www.latimes.com/moneytalk.