By Jessica Sommerfield
Believe it or not, getting married means paying more taxes for some people and less for others. It is known as the “marriage penalty tax” or “marriage bonus tax.” As a married couple, your income taxes will either go up (a marriage penalty) or down (a marriage bonus) because of the difference in the tax brackets (the range of incomes the IRS uses to determine how much you owe them).
But why does this happen? Well, back in 1969, the government tried to give couples a break by changing the income tax system. It made things better for some couples, but worse for others. Look up your salary in the 2016 federal tax tables below. If you are on the high end of a “Single Filer” tax bracket–surprise! Once you get married, you and your new spouse will have joined both your hearts and salaries as one, which means you will likely move to a higher tax bracket and pay more. So if you earn $77,000 a year, you only paid 25% tax when single, but if you are married and file separately, you pay 28% tax. Ouch! Who says love does not hurt?!
Wondering how marriage will change your bill? We are not tax experts so be sure to use this Marriage Tax Penalty and Bonus Calculator provided by the Tax Policy Center.
Beating the System
If you and your spouse-to-be have a low combined income and children, getting married could decrease your tax bill by increasing the amount of the Earned Income Tax Credit you qualify for (up to $6,269 for couples with three children who make less than $53,505 combined). It could also increase your Child Tax Credit to the maximum of $1,000 per child if you make under $110,000 combined. To learn more about the Child Tax Credit, check out the IRS chart here.
If you expect to pay more taxes now that you are married, filing your taxes as “married filing separately,” might save you. You will however lose the advantage of both the Earned Income Tax Credit and Child Tax Credit.
Jessica Sommerfield is a freelance writing student who enjoys taking in the beauty of the Pacific Northwest and living simply. She’s especially enthusiastic about running, fitness, and finding new ways to eat healthy on a budget. Follow her on Twitter: @JessicaLSommer
