Now that you have arrived back from your honeymoon, you may be nervous of what effects marriage may have on your taxes, the dreaded marriage penalty. Well we are happy to tell you that it is not as scary as you may think. Most married couples get a marriage bonus and pay less income tax than they would if each partner were single.
Over the years, Congress has made important strides toward alleviating the marriage penalty. Congress took steps to reduce that penalty, ensuring that the joint tax bill for married couples remains closer to the combined total they would have owed as single taxpayers. The top of the 10% and 15% brackets on joint returns are now precisely twice as high as the ceilings on single returns (they used to be less than double. Depending on the incomes, there still can be a marriage penalty. But if the taxpaying spouses have substantially different salaries, the lower one can pull the higher one down into a lower bracket, reducing their overall taxes.
One thing to take into consideration when filing jointly is tax deductions. The US tax code allows taxpayers to claim deductions (such as charitable contributions, mortgage interest, or payments for state taxes) on their income. Taxpayers can choose either an automatic standard deduction or else can choose to itemize their deductions. Two single people filing separate returns can each choose the deduction policy that benefits them more, but a married couple filing a single return will both be forced to use the same method. For example, if one person has no significant deductions, the person can take the standard deduction ($6,100 as of 2013). A different person, who has, for example, $10,000 in charitable contributions, would be better off itemizing his deductions since the standard deduction is $6,100 (single, 2013 tax year).
As higher incomes fall into higher brackets, though, the breakpoints on a joint return aren’t quite double the level on a single return. That could impose a marriage penalty, but it doesn’t guarantee one. The more unequal the spouses’ income, the more likely that combining them on a joint return will pull some of the higher-earner’s income into a lower bracket. That’s where much of the marriage tax bonus comes from — the fact that one spouse often makes much more income than the other. How you’ll fare depends on how your income compares with your husband’s or wife’s.