10 Tax Benefits of Marriage
While gaining some of the tax benefits of marriage isn’t the only reason for tying the knot, they certainly are a nice wedding gift from Uncle Sam if you do get married. There’s a wide variety of potential tax benefits when you’re married, such as filing status choices, lower tax brackets, larger tax breaks, retirement savings advantages, and more. But some tax disadvantages are also possible after you say “I do.”
Key Takeaways
- Married couples can choose between "Married Filing Jointly" or "Married Filing Separately" as their filing status. Filing jointly is typically easier and can lead to lower tax bills, but filing separately can be the better choice in certain situations.
- When married couples with differing incomes file jointly, income from the higher-earning spouse can be pulled down into a lower tax bracket, which will reduce the couple’s overall tax bill.
- Under the spousal IRA rules, a married person can contribute to an IRA even if they have no earned income for the year.
- In addition to income tax benefits, estate and gift tax savings might also be available to married couples, such as increased estate tax exemptions for surviving spouses and tax-free gifts between spouses.
Are there tax benefits of being married?
Congratulations if you recently tied the knot, or if wedding bells are in your near future. It’s an exciting time, with plenty of adjustments ahead as you transition from single to married life. You might also notice that some of those changes can help you financially. They can reduce your insurance rates, increase your Social Security benefits…and even lower your taxes.
Yes, that’s right! There are a number of potential tax benefits for married couples. In many cases, it’s in the form of a “marriage bonus,” which is where a married couple pays less tax than two similarly situated single people. This sometimes happens when an income threshold or other dollar amount for joint filers is more than twice the amount for singles.
Other tax benefits are only available to married couples. And sometimes married couples can simply double the impact of a tax benefit by taking it twice – once for each spouse.
So, how can you turn your marriage into tax savings? Here are 10 tax benefits of marriage that might apply to you.
1. Filing status options: Married Filing Jointly vs. Married Filing Separately
One tax benefit of being married is that you can choose between two filing status options: Married Filing Jointly or Married Filing Separately. And you can pick whichever option works best for you. On the other hand, if you’re single, you typically only have one filing status option (unless you have a child and can use the Head of Household filing status).
If you file jointly, you and your spouse only have to file one tax return that includes information about both of you – and only having to file one return can save you time and money. If you file separately, each spouse has to file their own return. Single people have to file their own tax return, too.
So, which filing status is better – Married Filing Jointly or Married Filing Separately? Most of the time, your tax bill will be lower if you file a joint return. One reason for this is that you can’t claim certain tax breaks if you file separately, such as the Earned Income Tax Credit, American Opportunity Tax Credit, and student loan interest deduction.
But it might make sense to file separately in some cases. For example, if you or your spouse had large medical bills during the year, filing separate returns could help you qualify for the medical expense deduction. That’s because the deduction is only available for qualifying expenses that exceed 7.5% of your adjusted gross income (AGI). By filing separate returns, the AGI reported on each spouse’s return will be lower, which might make it easier for the spouse who paid the medical bills to exceed the AGI threshold.
Just keep in mind that if one spouse itemizes on their return – which is required to claim certain deductions like the one for medical expenses – the other spouse also has to itemize, too. And if you itemize, you can’t also claim the Standard Deduction. This could make a difference when deciding whether to file a joint return or file separately.
TurboTax helps you determine which filing status is best for you. You can also read more about the two options in our article on Married Filing Jointly vs. Married Filing Separately.
2. Lower tax bracket for higher-earning spouses
When a married couple files a joint return, and there’s a significant difference between the two spouses’ income, their combined income can fall into a lower tax bracket than the higher-earning spouse would be in if filing as a single person. If this happens, the couple’s overall income tax bill will typically be lower than if they filed as two separate single taxpayers. That’s because some of the higher-earning spouse’s income will be pulled down from a higher bracket to a lower bracket, where the tax rate is also lower.
For example, suppose you and your spouse got married in 2024 and are filing a joint federal tax return for the 2024 tax year. In addition, you have $225,000 of taxable income for 2024 and your spouse has $45,000. As a result:
- you have a total combined taxable income of $270,000 ($225,000 + $45,000 = $270,000)
- you and your spouse are in the 24% bracket for joint filers
- you owe $50,885 in federal income tax
Now let’s compare that to two similarly situated single people filing their own tax returns for the 2024 tax year. So, like you and your spouse, one person has $225,000 of taxable income for 2024 and the other has $45,000. As a result:
- the first person is in the 32% tax bracket
- the first person owes $49,687 in federal income tax
- the second person is in the 12% bracket
- the second person owes $5,168 in federal income tax
- they owe a combined total of $54,855 in taxes ($49,687 + $5,168 = $54,855)
So, by filing as a married couple on a joint return instead of as two single people, you and your spouse save $3,970 ($54,855 - $50,885 = $3,970).
3. Bigger charitable deduction for certain married couples
Getting married could lead to larger charitable gift deductions for certain people (you have to itemize to claim this tax break). The deduction has various limits that are based on your AGI. For instance, the deduction for cash contributions during the year to charities, schools, hospitals, churches, and certain other organizations is generally limited to 60% of your AGI (50% of AGI if you’re donating property). But if someone gives more than the limit to charity, they still might be able to deduct the entire gift that year if they’re married and filing a joint return – but not if they’re single.
If you’re single, your AGI – and only your AGI – is used to determine the limit. However, if you’re married and filing a joint return, income from both spouses is combined to calculate one AGI for the return. Assuming both spouses have taxable income for the year, the combined AGI will be larger than the AGI for any individual spouse. As a result, the 60%-of-AGI limit will also be larger, which means a larger charitable contribution can be deducted for the year of the donation.
For example, suppose you’re married, filing a joint return, and claiming itemized deductions. Also assume:
- you and your spouse each have $50,000 of AGI for the tax year (for a combined AGI of $100,000)
- you made a one-time cash donation of $35,000 to charity during the tax year
- your spouse donated $5,000 in cash to various other charities during the tax year
- you and your spouse had a combined total of $40,000 in donations for the tax year ($35,000 + $5,000 = $40,000)
Since the 60% limit for $100,000 of AGI is $60,000 ($100,000 x 0.60 = $60,000), all $40,000 in cash donations is deductible because it’s below the limit.
Once again, let’s compare this result to the outcome for two single filers in a similar situation. So, assume:
- each person has $50,000 of AGI for the tax year
- each person has a $30,000 limit on their charitable gifts deduction for the year ($50,000 x 0.60 = $30,000)
- the first person made a one-time cash donation of $35,000 to charity during the tax year
- the second person donated $5,000 in cash to various other charities during the tax year
As a result, all of the second person’s $5,000 in cash donations are completely deductible, since it’s below the $30,000 limit. However, the first person can only deduct $30,000 of their $35,000 donation that year (although the $5,000 that’s over the limit might be deductible on future tax returns).
4. Larger tax break for married couples selling a home
You may qualify for a capital gains tax exclusion when you sell your home if you lived there for at least two of the five years immediately before the sale. If you’re single, the first $250,000 of profit from the sale is tax-free, while any profit exceeding that amount is treated as capital gain on your tax return.
However, if you’re married and file a joint return, the exclusion amount jumps from $250,000 to $500,000. So, if you’re about to be married and own a home that you could sell for a large profit, you might want to wait until after you say “I do” to sell your house.
To show how much money this can save you, suppose:
- you’re currently single, but engaged to be married next year
- you bought a home 10 years ago for $400,000
- you lived in the home since buying it
- the home is now worth $700,000
If you sell the house while you’re still single, you’ll have $300,000 in profit ($700,000 - $400,000 = $300,000). The first $250,000 of profit will be tax-free, while the remaining $50,000 will be subject to the capital gains tax. But if you wait until after getting married to sell the house, the entire $300,000 of profit will be tax-free if you file a joint return, since it’s less than the $500,000 exclusion amount.
5. Higher Earned Income Tax Credit for certain married couples
The Earned Income Tax Credit helps lower-income workers reduce their tax bill. Since it’s designed to benefit lower-income taxpayers, you’re not eligible for the credit if your income is too high. But on the other hand, since it’s also designed to help working people, you also need to have a certain amount of earned income – such as wages, salary, or tips – to qualify.
Both the income minimums and maximums are different for single people and married couples filing a joint return (they also depend on the number of qualifying children you have). In addition, the income requirements for joint filers are based on the couple’s combined income. As a result, a single person who doesn’t work (and, therefore, isn’t eligible for the credit) might be able to claim the credit if they were to marry a person with a modest income.
As an example, suppose you’re single and you don't work. Since you don’t have any earned income, you can’t claim the Earned Income Tax Credit. However, if you get married and file a joint return, you may be able to claim the credit if you and your spouse’s combined earned income is below the maximum amount allowed to claim the credit as a couple.
6. Spousal IRAs for non-working spouse
There can also be some tax benefits of marriage as you save for retirement. You generally can’t contribute to an individual retirement account (IRA) unless you have taxable earned income, such as wages, salary, tips, commissions, self-employment income, and the like. Your annual contributions to one or more IRAs also typically can’t exceed your earned income for the year (they also can’t exceed the IRA contribution limit for that year).
However, if you’re married and filing a joint return, you may be able to contribute to your own IRA even if you didn’t have taxable earned income the year, as long as your spouse has earned income for the year. This exception – known as the “spousal IRA” rule – doesn’t apply to single people.
There are still limits to spousal IRA contributions. For example, total IRA contributions for both you and your spouse can’t be more than the taxable earned income reported on your joint return. It also can’t exceed the combined total of the annual IRA contribution limit for each spouse.
7. Stretch IRAs for surviving spouse
If you’re married, your IRA might be more tax-friendly after you die than if you’re single. That’s because a spouse who inherits your IRA can generally leave money in the account longer than someone else who inherits it.
A few years ago, most people who inherited an IRA could slowly pull money from the account over their own lifetime, instead of being required to drain the account more quickly. That way, funds in the IRA could continue to grow tax-free for an extended period of time – sometimes for decades. Inherited IRAs that were kept open for long periods of time were commonly called “stretch IRAs,” because the heir could stretch out distributions from the account for years.
However, starting in 2020, most people who inherit an IRA must withdraw all funds from the account within 10 years. If the inherited IRA is a traditional IRA, taxes generally must be paid on the amount withdrawn (and sometimes for distributions from a Roth IRA, too). But stretch IRAs are still permitted for a surviving spouse who inherits an IRA.
So, if you’re married, your spouse can stretch out distributions from an IRA they inherit from you. This can result in significant tax savings over time. Your surviving spouse can also treat the IRA as their own account, which means they can make additional contributions to the account. Required minimum distributions (RMDs) can also be based on your surviving spouse’s age – not yours – which can also have tax benefits.
On the other hand, if you’re single, stretch IRAs are only available if the person who inherits your account is your minor child, disabled, chronically ill, or less than 10 years younger than you. They also can’t put more money into the account, and RMDs are based on your age – not theirs.
8. “Tax shelter” opportunities if one spouse has business losses
Getting married can also create a “tax shelter” opportunity if one spouse is self-employed, but losing money. That’s because the self-employed spouse’s business losses can be used to offset the other spouse’s taxable income.
For example, suppose you’re married and filing a joint return for the 2024 tax year. Also assume:
- you have $125,000 of taxable income from wages for the year
- your spouse has a net loss of $20,000 for the year from a business operated as a sole proprietorship
- your spouse doesn’t have any other sources of income for the year
As a result, your combined taxable income is $105,000 ($125,000 - $20,000 = $105,000), which translates to a $13,206 tax bill for you and your spouse.
Now, for comparison's sake, let’s take a look at the results if two similarly situated single people filed their own tax returns for the 2024 tax year. So, assume:
- the first person has $125,000 of taxable income from wages for the year
- the first person would owe $23,043 on their $125,000 of taxable income
- the second person has a net loss of $20,000 for the year from a business operated as a sole proprietorship
- the second person doesn’t have any other sources of income for the year, so there’s nothing to offset with the business loss
- the second person has $0 of taxable income and, therefore, doesn’t owe any tax
As a result, $23,043 of tax is due between the two single people. That’s a total of $9,837 in additional taxes when compared to the tax due for the married couple filing a joint return ($23,043 - $13,206 = $9,837).
In this example, some of the tax savings from filing as a married couple are from the $105,000 of combined income on a joint return falling into a lower tax bracket (22%) than the $125,000 of income for the first single person (24%). (See the discussion above about lower tax brackets for higher-earning spouses.) But if you didn’t subtract your spouse’s business loss from your income on the joint return, your combined income of $125,000 would result in a tax bill of $17,606. So, deducting your spouse’s business loss from your taxable income on the joint return saves you $4,400 on its own ($17,606 - $13,206 = $4,400).
9. “Benefit shopping” for married couples
Many tax-advantaged accounts – such 401(k) plans, health savings accounts (HSAs), and flexible spending accounts (FSAs) – are available as employee benefits through work. These types of accounts can offer great tax savings through tax-free contributions, tax-free growth, and/or tax-free withdrawals.
If you’re single, your benefit options are generally limited to whatever your employer offers (although you can get certain tax-advantaged accounts outside of work). But if you’re married and both you and your spouse are employed, you probably have more options available to you.
If both you and your spouse have benefit packages from your jobs, you can usually pick the most valuable benefits offered by both employers. By choosing the right mixture of benefits from both employers, married couples can often increase their tax savings.
For example, if your employer doesn’t offer a healthcare FSA, but you marry someone who has access to one through work, you will then have access to the tax benefits of an FSA through your spouse. On the other hand, if your employer offers an HSA with matching contributions, but your spouse’s employer doesn’t, you may decide as a couple that you’re better off with an HSA (you can’t have both an HSA and a healthcare FSA in the same year). The point is that you have more tax-savings options through “benefit shopping” if you’re married.
10. Estate and gift tax savings for married couples
There are a few tax benefits of marriage when it comes to federal estate and gift taxes. These taxes typically only apply to very wealthy people. However, if you fall into that category, the tax benefits of marriage can result in huge tax savings.
First up is the estate tax marital deduction. Thanks to this tax break, any property that passes to your spouse when you die is exempt from the federal estate tax.
The estate tax exemption can be more valuable for married couples, too. The exemption is $13.99 million for people who pass away in 2025. So, for instance, if your estate is worth $10 million and you die in 2025, $10 million of your exemption can be used to bring your estate’s value down to $0 for estate tax purposes. However, any unused amount can be transferred to your surviving spouse. So, the estate tax exemption for your spouse’s estate can be up to twice the normal amount if your full exemption isn’t used.
Married people can also give more while they’re alive without having to report their gifts to the IRS or pay tax on them. First, as with the estate tax, there’s a gift tax marital deduction. So, gifts between U.S. spouses generally aren’t taxable.
In addition, if you give money or other property to someone else, it’s tax-free if the value is less than the annual gift tax exemption ($19,000 for 2025). But that limit is per person, so if you’re married, both you and your spouse can give the full amount to a single person without having to report the gift to the IRS. So, for instance, both you and your spouse can each give $19,000 to your child in 2025, for a total gift of $38,000, without triggering any gift tax consequences.
There’s also a lifetime gift tax exemption, which is the same as the estate tax exemption ($13.99 million for people who die in 2025). Basically, no federal gift tax is due until the total amount of gifts reported to the IRS exceeds the lifetime exemption amount for that year. If you’re married, each spouse can give up to the lifetime limit. So, for example, a married couple can give a total lifetime amount of up to $27.98 million through 2025 ($13.99 million x 2 = $27.98 million).
TurboTax Tip:
In addition to being the same amount, the estate tax exemption and lifetime gift tax exemption are connected in another way. Your estate tax exemption is reduced by the amount of any gifts that count against your lifetime gift tax exemption. This prevents you from giving away too much property in an attempt to avoid the estate tax.
Are there tax disadvantages of marriage?
Just as there can be tax benefits of marriage, there can also be negative tax consequences if you’re married.
For instance, you may experience a “marriage penalty,” which is the opposite of a “marriage bonus.” This can occur when an income threshold or other dollar amount for joint filers is less than twice the amount for singles.
Other tax-related drawbacks of being married are based on liability issues that go along with filing a joint return.
If you’re about to walk down the aisle, here are a few potential tax disadvantages of being married to watch out for when you get back from your honeymoon.
Higher income tax rate for wealthy couples
For most federal income tax brackets for the 2024 tax year, the minimum taxable income for joint filers is exactly twice as much as the amount for single filers. For example, the 2024 minimum taxable income for the 22% bracket is $94,300 for joint filers, which is twice as much as $47,150 minimum amount for single filers.
However, that’s not the case for the 37% bracket – which is the highest bracket for 2024. For the 37% bracket, the minimum taxable income for joint filers is $731,200, while the minimum for single people is $609,350. Since the threshold for joint filers is not twice as much as the threshold for singles, a marriage penalty is possible.
For example, if you and your spouse each have $500,000 of taxable income in 2024, your combined income of $1 million puts you in the 37% bracket if you file a joint return. On the other hand, if you weren’t married, neither you nor your spouse would be in the 37% bracket. That’s because your respective incomes ($500,000 each) would be below the 37% bracket’s $609,350 threshold.
No (or smaller) tax breaks for certain married couples
As described above, there’s a potential tax benefit for married couples who want to claim the Earned Income Tax Credit when one spouse doesn’t work. However, there’s also a possible disadvantage for married couples trying to snag that credit – and a few other tax breaks.
You can’t claim the Earned Income Tax Credit if your income is above a certain amount (the exact amount depends on how many qualifying children you have). That’s because the credit is gradually phased out – potentially to $0 – if your AGI reaches a certain level. But the income limits for joint filers aren’t twice as much as the limits for single filers – which creates another potential marriage penalty.
To illustrate, first suppose there are two single people filing their own tax returns for the 2024 tax year. They’re both eligible for the Earned Income Tax Credit, but neither of you have any qualifying children. Also assume:
- the first person has $17,000 of AGI
- the second person has $15,000 of AGI
Since both incomes are below the point at which the 2024 credit is completely phased out for single filers with no qualifying children ($18,591), both people can claim at least a partial credit.
On the other hand, suppose you’re married and filing a joint return for the 2024 tax year. Also assume:
- you have $17,000 of AGI
- your spouse has $15,000 of AGI
Since your combined AGI of $32,000 is above the point at which the credit is completely phased out for joint filers with no qualifying children ($25,511), your credit would be reduced to $0.
Married couples might run into this type of problem with other tax breaks, too. For instance, the income at which a phase-out begins and/or ends for joint filers isn’t twice as much as the amount for single filers for the:
- Adoption Tax Credit and exclusion for employer-provided adoption assistance
- interest exclusion for Series EE and I savings bonds
- IRA deduction (only for contributions to a traditional IRA)
Higher tax rate on long-term capital gains for married couples
Married couples might have to pay more tax when selling stock or other capital assets than their single counterparts. That’s because the threshold for the 20% capital gains tax rate – which is the highest rate for long-term capital gains – is only slightly higher for joint filers than it is for single filers.
For the 2024 tax year, joint filers reach the 20% rate if their combined taxable income is over $583,750, while single filers need more than $518,900 of taxable income to hit that rate. Since the threshold for joint filers is not twice as much as the threshold for singles, married couples are more likely to pay the higher rate than two single people with the same total income.
Restricted Roth IRA contributions
Higher-income people can’t contribute to a Roth IRA. That’s because the annual IRA contribution limits are gradually reduced to $0 for contributions to a Roth IRA if your income exceeds a certain amount.
However, as is the case with certain tax breaks (see above), the phase-out thresholds for joint filers are less than twice the amount for single filers. This can create a marriage penalty.
For example, the annual IRA contribution limit for the 2024 tax year is $7,000 ($8,000 if you're at least 50 years old). However, the limit is gradually reduced to $0 if you’re single and your modified AGI hits $146,000, or if you file a joint return and your modified AGI reaches $230,000. As a result, married people filing a joint return are more likely to have additional restrictions on their ability to put money in a Roth IRA than similarly situated single people.
Responsibility for spouse’s taxes
Generally speaking, married couples who file a joint tax return are equally responsible for any tax due on the return. As a result, if your spouse doesn’t pay any tax you owe, then you’re on the hook for it – and any IRS interest and penalties that go along with it. In addition, if your spouse fails to report some income or makes another mistake on your joint return, you could be held responsible for any additional taxes the IRS assesses.
You can seek what’s called “innocent spouse relief” if you’re held responsible for your spouse’s taxes, interest, and/or penalties because you filed a joint return (file Form 8857 to request relief). The IRS can waive liability for a joint tax debt under certain circumstances, such as:
- your spouse omitted income or claimed false deductions or credits
- you’re divorced, separated, or no longer living with your spouse
- it wouldn't be fair to hold you liable for the tax
Married couples can also avoid joint liability by filing separate returns. However, as described above, you might end up paying more in tax by filing separately.
Loss of tax refund
There’s another risk associated with joint returns – reduced tax refunds. The IRS can take part of your joint refund if your spouse owes past-due federal tax, state income tax, unemployment compensation debts, child support, alimony, or a federal non-tax debt (such as a student loan). So, basically, your refund is being used to pay your spouse’s debt.
However, you may be able to get your share of the refund back. File Form 8379 to request payment. You won’t get your money back if you were jointly responsible for the debt.
Again, married couples can avoid this problem by filing separate returns. Just be aware of the potential drawbacks that may go along with that approach.
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