marriage tax penalty

What is a Marriage Tax Penalty?

Ok sure, taxes are convoluted and we sometimes have trouble understanding exemptions…how to file…dependents. What kind of deductions should I take? If you don’t have the pleasure of being able to afford a CPA, you may be looking for insight on tax rules. If you’re married and you can’t decide how to file, or you heard the dreaded term “marriage tax penalty” here are a few things you should know when diving into your taxes this year. 

Marriage Tax Penalty – The Myth, the Legend

Filing your taxes as a single person can be tricky enough – withholding, W-2s, deductions if you happen to have a side business or you’re an entrepreneur. But what if your question this time is merely about filing as a married person? If you’ve been married to your partner a long time, there’s a decent chance you are well versed in how filing as a married person might include a marriage tax. Because marriage status these days can have a serious impact on things like health care and financial support, knowing whether or not your situation may mean you’ll be subject to an IRS marriage penalty is really important. Here are a few things to consider when filing your taxes, especially if you’re using your upcoming nuptials as a motivation. 

IRS Marriage Penalty – What exactly does that mean?

You may be relieved to know that most married couples don’t need to worry about being penalized on their taxes for being married. As of 2019, married couples would need to earn income that places them in a much higher tax bracket in order to owe a tax penalty for combining their incomes on their taxes. 

It’s important to note that IRS rules dictate the deduction of a marriage tax penalty when spouses’ incomes are more equal and it bumps them into a different tax bracket by filing jointly. This means even when you make less than $50K a year, if your spouse makes the same and you have no dependents, you may be required to pay more on your taxes. New changes in taxation rules dictate that most people don’t even come close to the minimum income requirement (Combined income over $600,000), but depending on income, investments, mortgage, and dependents, you may want to invest in the help of a CPA to help handle your bookkeeping and tax filing. 

Can I avoid these kinds of mark downs?

Interestingly enough, most U.S. couples don’t have to worry about a marriage penalty tax. In fact, it’s more likely that you’ll receive a tax bonus based on your marital status. Ways you can help mitigate the impact of a marriage tax penalty include marrying earlier in the year. By marrying earlier in the year, it’s more likely you’ll adjust your withholdings and the appropriate taxes will be taken out to cover your filing status.

Properly filing taxes is important for many reasons – owing money yearly can be a burden on smaller income families, and improper filings may lead to issues like owed back taxes. Owing taxes can impact your travel status, and can impact your ability to travel internationally. It’s wise to invest in the help of a CPA or tax professional to assist you if you’re unsure how to file your taxes appropriately. We know how confusing tax season can be, so we hope you’ve found some useful information here!


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