Remarriage Penalty? Filing status issue
My finacee and I are planning a wedding for December or January. We are both single parents. I itemize deductions. My fiancee files head of household. I am trying to understand the tax ramifications of marrying before January 1. My fiancee has no deductions to itemize. My AGI for 2008 was 41,423 and my itemized deductions were 10,523. His AGI was around 33,000 and he used the standard deduction of 8,000 for head of household. I know we can not file separately as we would both have to itemize, so we would be married filing jointly. Am I correct in thinking that we would lose nearly 100% of his head of household deduction of 8,000 since married filing jointly is 10,900 (for 2008) and I already was as at 10,523?
I hate to be less than romantic but as single parents of teenagers every penny counts and if a matter of days means the difference in a thousand or more dollars in tax, it may help us set the date.