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My wife got a job offer and we need to decide if tax-wise it's better for her to start in December 2019 or January 2020. Does her status of being employed or unemployed as of December 31st affect taxes in any way? Assuming that we file a joint return, I don't care about W4 (withholding) but only about actual tax due and that my wife's income is expected to be close to $0?

Or, in other words: assuming I get $100k/year and my wife is unemployed vs. I get $50k/year and my wife get's $50k/year. Will we pay the same amount of taxes in these two cases (again W4 is not an issue here)

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    Would employment or unemployment impact some benefit program that your family is receiving? Does having the new job allow you to get a better health insurance plan?
    – mhoran_psprep
    Commented Nov 21, 2019 at 0:01
  • In MFJ, both spouse's incomes are lumped together in one number.
    – RonJohn
    Commented Nov 21, 2019 at 0:22
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    What about Social Security credits? I think if she can earn $5,440 in this year, she gets social security credit for the complete year. She can also get spousal benefits from your social security, but those might be lower.
    – user3757614
    Commented Nov 21, 2019 at 1:29
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    Although you're focusing on income taxes, it may be important to consider other factors. Social Security has been mentioned. Medical and other benefits could be important, too. If she begins a job and has medical insurance available via her new employer, that could trigger changes in what your insurance costs (if your employer is covering her now) - and if your plan year restarts on Jan 1, you're probably in open enrollment season now - it may be important to time these benefits changes carefully.
    – dwizum
    Commented Nov 21, 2019 at 14:19
  • Thank you all. Indeed other benefits might impact decision. In my particular case: 1. My wife currently receives medical insurance through my employer. Her new employer works in medical industry and provides better/cheaper insurance. But unfortunately open enrollment period at my work is already closed so we'll only make changes starting 2021. 2. As for Social Security Credit this is a good point. We are not US Citizens and currently we don't plan to retire in the US, but might be eligible for SS benefits, so having credits counted for this year is a good thing for us
    – mdk
    Commented Nov 22, 2019 at 6:46

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If you and your wife file as married filing jointly, the only difference her starting date (2019 or 2020) will make in your Federal Income Tax is that the two of you will have more income in 2019 because she started in 2019. And, note: the pertinent date is not when she started her job, but when she received her first paycheck. State Income Taxes are often tied to Federal Income Tax so there is unlikely to be any difference in your State Income Tax.

As one of the commenters noted, there might be a difference in eventual Social Security benefits, but it is likely to be zero to small. Factors to consider are how many (if any) quarters of SS she has already paid, how long she plans on working, whether she is on a career path that will lead to a significant increase in earnings, and how old you both are. But, truly, unless you enjoy doing the numbers (or are close to retirement age), I doubt that it is worth running hypothetical scenarios.

You may want to find out if there are company benefits that vest after a certain time, and if so, whether starting a month earlier makes sense.

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