Our mission is to protect the rights of individuals and businesses to get the best possible tax resolution with the IRS.

  • (818) 938-2211
Pinterest Facebook Instagram Youtube Twitter
Tax Relief Center
  • Blog
  • State Taxes
    • State Tax Deductions
    • State Tax Information
    • State Tax Preparation
    • State Tax Rates
    • State Tax Refund
    • State Tax Return
  • Federal Taxes
    • Federal Tax Deductions
    • Federal Tax Information
    • Federal Tax Preparation
    • Federal Tax Rates
    • Federal Tax Refund
    • Federal Tax Return
  • Tax Help
    • Late Tax Filing
    • Retirement Taxes
    • Tax Penalty
    • Tax Relief
  • Solutions
    • Lower Taxes
    • Tax Debt Relief
    • Tax Resolution Services
    • Tax Reviews
    • Tax Solutions
  • Resource Center
    • Tax Calculator
    • Tax Forms
    • Tax Guides
    • Track Your Refund
Menu
  • Blog
  • State Taxes
    • State Tax Deductions
    • State Tax Information
    • State Tax Preparation
    • State Tax Rates
    • State Tax Refund
    • State Tax Return
  • Federal Taxes
    • Federal Tax Deductions
    • Federal Tax Information
    • Federal Tax Preparation
    • Federal Tax Rates
    • Federal Tax Refund
    • Federal Tax Return
  • Tax Help
    • Late Tax Filing
    • Retirement Taxes
    • Tax Penalty
    • Tax Relief
  • Solutions
    • Lower Taxes
    • Tax Debt Relief
    • Tax Resolution Services
    • Tax Reviews
    • Tax Solutions
  • Resource Center
    • Tax Calculator
    • Tax Forms
    • Tax Guides
    • Track Your Refund

Marriage Tax Penalty | How Does It Work?

Feature | Marriage Tax Penalty | How Does It Work? | why is there a marriage tax penalty

March 29, 2018 By Michael Taggart

Why is there a marriage tax penalty? To make the best decisions about how to avoid this or at least how to manage your finances more effectively, it pays to understand what marriage tax penalty is. It is also important to know how it works. You may choose to avoid marriage tax penalty by filing separately, but it is often not the answer for a number of reasons. Today, we’ll consider these issues and more.

Marriage Tax Penalty | What You Need to Know

 

The Marriage Tax Penalty: How Does It Work?

 The Marriage Tax Penalty: How Does It Work? | Marriage Tax Penalty | How Does It Work?
If you’re wondering “Why is there a marriage tax penalty?” you’re not alone. The marriage tax penalty is not an official policy, rather, it is a series of outcomes resulting from filing together. When you file together, the IRS calculates your income, tax brackets, and deductions differently. The result may be a penalty or a marriage bonus. Again, these are not official terms. They are results.

For example, when you both work and make the same amount of income and file together, you tend to suffer a penalty. That’s because your combined income puts you into a higher tax bracket than your income will be if you were both filing individually, even though the total is the same amount.

Do You Qualify For IRS Back Tax Relief? Take The Quiz Now!

Also, when a couple is unmarried, the breadwinner can claim head of household. That results in a larger standard deduction, which is lost when the couple marries. According to the Tax Foundation, this may result in a marriage penalty as high as 12 percent of the couple’s overall income.

But, when two couples with different income levels marry, a bonus usually results. That’s because the lower income pulls the total amount of taxable income down. The standard deduction has a greater relative effect, and the resulting tax bracket is lower. Bonuses can be as high as 20 percent of the couple’s income.

For the most part, people do not make their marriage decisions on the tax code. But if you were going to, these are important factors. There’s also a deeper lesson here. Our government and tax code are theoretically supposed to be neutral in our life choices, yet this proves the tax code is not neutral after all. It’s not possible to achieve both neutrality about marriage and progressive taxation. So for now, you have to work with the system we have. Here are some other considerations.

Married Filing Separately: Probably Not the Answer

Understanding Tax Terms: The Marriage Penalty- Couples filing jointly still get the short end of the stick https://t.co/xDYF4ecR4A pic.twitter.com/KwEvLGFdoa

— Leslie Garrett, PhD (@LeslieGarrett) July 28, 2017


If you are taking your taxes into consideration when wondering when/if to get married, there are a few other factors to keep in mind. For one thing, married couples who choose not to file together do not file individual returns. Instead, they file Married Filing Separately. Some people think the answer to the marriage penalty tax bill is to file under that status. Then you’re likelier to remain in those lower tax brackets.

But while you receive exactly half of the standard deduction ($6,350 compared to the $12,700 Married Filing Jointly couples receive), you miss out on a lot of credits and tax deductions. Married filing jointly couples receive deductions such as:

Do You Qualify For IRS Back Tax Relief? Take The Quiz Now!
  • Education benefits
  • The Earned Income Credit
  • The Child and Dependent Care Credit
  • The Adoption Credit

But, filing separately, you may not. You will also receive half the standardized deduction. The number of itemized deductions on the return also decreases. Plus, often you are otherwise limited in your ability to reduce your taxable income.

Downsides of Married Filing Jointly

Downsides of Married Filing Jointly | Marriage Tax Penalty | How Does It Work?
Married Filing Jointly does include a few risks. For instance, you are responsible for the other’s tax debt in the event they have not been honest on the return or with you. That doesn’t happen often, but it does occur. If your spouse is self-employed and hasn’t been careful about making their payments, you may lose any refund you’d otherwise have gotten.

 

Here’s a video by Wall Street Journal about marriage tax penalty:

At the end of the day, only you and your spouse know whether it makes sense to get married and file together. It’s best just to be aware of what it means for your finances to marry, and to file separately or jointly. If you aren’t sure, talk to a tax professional. They will be able to walk you through the numbers and help you make the best decision.

Does the article help you understand marriage tax penalty? Share your thoughts in the comments section below!

Up Next: Pros and Cons of Tax Debt Relief

4.5
04

Filed Under: Tax Guides, Tax Penalty

Follow Us:

  • Facebook
  • Instagram
  • Pinterest
  • Twitter
  • YouTube

Popular Articles

  • Late Tax Filing? Here’s Everything You Need To Know
  • How Does The Child Tax Credit Work?
  • Don’t Miss These Posts On Tax Relief Center…
  • IRS Debt Forgiveness Program: Are You Eligible?

Join Us On Instagram!

For immediate assistance with an IRS tax matter call (818) 938-2211, or request online.
Tax Help Solutions
TaxReliefCenter.Org is owned and operated by:
Envoy Media Group, Inc.
19350 Business Ctr Drive, Suite 101
Northridge, CA 91324
  • About Us
  • Contact Us
  • Privacy
  • Terms Of Use

This copyrighted material may not be republished without express permission. The information presented here is for general educational purposes only.

Copyright © 2022 · Tax Relief Center


Disclaimer - TaxReliefCenter.org does not provide direct tax relief services but upon request, serves as a locator service for BBB accredited companies. This is a free informational website that is not affiliated with the IRS. The information on this website is for general information purposes only and nothing on this site should be taken as legal advice for any individual tax case or situation. Prior to enrolling in any tax resolution program, it is recommended that consumers seek the advice of a tax accountant or tax resolution specialist to fully understand all program details. Upon the request of visitors, free tax resolution reviews are provided with no obligation to enroll in, or purchase, any product or service.