Key Takeaways
- To reduce the so-called marriage penalty, Congress made the thresholds for six of the seven tax brackets for married couples filing joint returns exactly double those available to single filers. The sole exception is for the highest tax rate of 37%, which applies when taxable income exceeds $731,200 for married couples filing jointly, compared to $609,350 for Single taxpayers (tax year 2024).
- When one spouse earns substantially more than the other, combining the incomes on a joint return may pull some of the higher earner's income into a lower bracket, resulting in the “marriage bonus.”
- Using the Married Filing Separately status rarely lowers a couple's tax bill and comes with several special rules, including not being eligible for education credits or deducting student loan interest.
- If you sell a home, the amount of tax-free profit you can receive from the sale of your home doubles from $250,000 to $500,000 once you’re married, provided at least one of you owned the home for at least two of the last five years, and both of you lived in it for at least two of the last five years.
Marriage and taxes
Taxes might be the last thing on your mind on your wedding day, but tying the knot can have a big impact on your tax situation. Here are some of the most important things you should know.
Marriage tax penalty or marriage bonus?
Maybe you've heard of the so-called marriage tax penalty: a quirk in the tax law that sometimes causes married couples to pay more income tax than they would if they had remained single. Marriage penalties typically occur when the tax brackets, Standard Deduction, and other aspects of the tax code available to married couples aren't double those available to single taxpayers.
Over the years, Congress has taken steps to reduce the effects of the marriage penalty. For example, when recent tax reform revised the tax brackets, it made the thresholds for six of the seven tax brackets for married couples filing joint returns exactly double those available to single filers. One exception is where the highest tax bracket starts:
- For the 2024 tax year, single people pay a rate of 37% on taxable income over $609,350.
- For married couples filing jointly, that threshold is just $731,200 — far from double that available to single taxpayers. That's a significant marriage penalty for high-income couples.
In some cases, married couples actually get a marriage bonus. This means they pay less income tax as a married couple than they would if they stayed single.
Will your wedding day lead to a marriage penalty or a marriage bonus? That depends on a lot of factors. But, in general,
- The more unequal two spouses' incomes, the more likely that combining those incomes on a joint return will pull some of the higher earner's income into a lower bracket. That's when the marriage bonus occurs.
- When two high-earning spouses have relatively equal incomes, the odds of getting hit with the marriage penalty go up.
What is your filing status?
If you do face a marriage penalty, don't try to get around it by continuing to file as a single person. If you're legally married as of December 31 of the tax year, the IRS considers you to be married for the full year. Usually, your only options are to file as either Married Filing Jointly or Married Filing Separately.
Using the married filing separately status rarely works to lower a couple's tax bill. Choosing that status comes with several special rules, including:
- You can't claim the Earned Income Tax Credit or the Child and Dependent Care Credit unless you meet specific requirements for married but separated parents.
- You can't claim education credits, including the American Opportunity Credit and the Lifetime Learning Credit.
- You can't deduct student loan interest.
- If one spouse itemizes deductions, both must itemize — even if the Standard Deduction would result in a lower tax bill for the other spouse. You can't mix and match.
TurboTax Tip:
If the name on your tax return doesn't match the name the Social Security Administration (SSA) has on file, it'll likely cause problems at the IRS when your return is processed. If you haven’t changed your name with the SSA, you can still file a joint return with your spouse as long as you use the name shown on your Social Security card.
Check your withholding
Once you're back from the honeymoon, you and your spouse may need to adjust the withholding from your paychecks. You can do this by filling out a new Form W-4.
The IRS revised Form W-4 in 2020. The new form helps you determine how much federal income tax your employer should withhold from your paychecks based on your:
- filing status
- other income
- credits and deductions
One of the easiest ways to fill out Form W-4 is to first use TurboTax's W-4 Withholding Calculator. The calculator will walk you through a series of questions about your personal information, income, credits and deductions and provide instructions for completing a new W-4. Then, you simply turn the completed form into your employer and let them handle the rest.
Coordinate benefits
Speaking of your jobs, being married could open up some new opportunities to save through your employer. Draw up a list of the tax-favored fringe benefits at each workplace. If you can be covered by your spouse's medical plan, for example, maybe you can trade your coverage for another benefit.
Change the name on your Social Security card
If you changed your name when you got married, you need to let the Social Security Administration (SSA) know. Otherwise, if the name on your tax return doesn't match the name the SSA has on file, it will likely cause problems at the IRS when your return is processed. If you're expecting a tax refund, it might be delayed until the discrepancy is resolved.
- You can change your name with the SSA by filling out Form SS-5. Take the completed form into your local SSA office along with documents proving your identity and an original or certified copy of your marriage certificate.
- If you're up against the tax filing deadline and haven't yet changed your name with the SSA, you can still file a joint return with your spouse. Just be sure to use the name shown on your Social Security card.
Selling a home?
Marriage often involves combining two households into one. In some cases, that means selling homes owned by one or both spouses.
The good news is that once you're married, the amount of tax-free profit you can receive from the sale of your home doubles from $250,000 to $500,000. Here's how that works.
- To avoid paying taxes on up to $250,000 profit from selling a home, one spouse must have lived in and owned the house for at least two of the last five years.
- To qualify for the larger $500,000 tax-free gain, both spouses must have lived in the home for at least two of the last five years, and at least one spouse must have owned the home for at least two of the last five years.
Still wondering how getting married will impact your tax return? Don't worry about knowing all the tax rules.
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