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The Marriage Tax: What is it and how does it affect me?

Despite Congressional attempts to ease the tax burden on married couples, many newlyweds stumble upon the so-called “marriage tax” the first time they attempt to complete their 1040 forms after the wedding. Although the government does not explicitly tax married couples, tax laws tend to provide stronger relief to unmarried individuals than to spouses who earn similar incomes.

Because the Internal Revenue Service calculates tax based on household income, a couple with dual incomes could inadvertently push themselves into a higher tax bracket than they would be charged it if they remained single. In a handful of cases, some couples choose to live together and remain unmarried, rather than bear the extra financial burden.

To combat the effects of the marriage tax, experts recommend that you maximize your itemized deductions whenever possible. Talk with your own financial planner or tax expert about putting some of these ideas to work for you:

  • Filing jointly reduces your overall tax burden by allowing you to claim higher standard deductions. Filing separately may look good on paper, but forces individuals into higher tax brackets than they enjoyed during single life.
  • When filing jointly, contribute the maximum amount of money per year to your individual retirement accounts. The deductions may offset any jump into a higher tax bracket.
  • If you or your spouse paid significant medical expenses during the year, you may benefit from filing separately. Although you eliminate some valuable deductions, the injured spouse can claim tax breaks by qualifying at a lower percentage threshold.
  • Remember to use tax software that calculates the differences between filing jointly and filing separately. In addition to saving time, the software can highlight the most effective tactics for increasing your tax returns.


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