smart spending

Attention, singles: the true price of love

What happens once you commit
Next
8 of 9
Back

Come tax time, being married can cost you, says Janet E. O'Herron, a CPA in Deltona, Fla. Although the marriage penalty has been eliminated for couples with lower incomes, it still exists to a degree for higher-income earners.

Imagine two fictional couples. Bob and Mary are single and cohabiting but must file taxes as singles. They earn $50,000 per year each. Bob owns the home.

Bill and Margaret are married, own a home and each earns $50,000, too. Yet Bob and Mary will pay $11,113 in federal taxes while Bill and Margaret, who file jointly, fork over $12,538.

In this instance, the "married couple can only take the itemized deduction, whereas the two single people living in the same home have the added benefit of the itemized deduction plus the standard deduction for the second person," O'Herron says.

Estimated cost: $1,425 in extra taxes for Bill and Margaret.

 

 

advertisement

Show Bankrate's community sharing policy
          Connect with us
MORTGAGE HOME EQUITY AUTO CDs CREDIT CARDS
Product Rate Change Last week
30 year fixed 3.93%  0.22 4.15%
15 year fixed 3.03%  0.09 3.12%
5/1 ARM 3.27%  0.08 3.19%
 
View Rates in your area Next
Product Rate Change Last week
30K FICO-based HELOC 4.32%  0.02 4.30%
50K FICO-based HELOC 4.06% --0.00 4.06%
100K FICO-based HELOC 3.92%  0.01 3.91%
 
View Rates in your area Next
Product Rate Change Last week
60 month used car loan 2.81% --0.00 2.81%
48 month used car loan 3.04% --0.00 3.04%
60 month new car loan 3.24% --0.00 3.24%
 
View Rates in your area Next
Product Rate Change Last week
1 Year CD 1.00%  0.02 0.98%
2 Year CD 1.19%  0.02 1.17%
5 Year CD 1.85% --0.01 1.86%
 
View Rates in your area Next
Product Rate Change Last week
Balance Transfer Cards 15.73%  0.02 15.75%
Cash Back Cards 16.43%  0.02 16.45%
Low Interest Cards 10.98%  0.02 10.96%
 
Next
advertisement
FRUGAL NEWSLETTER

Discover new ways to cut costs and save more every day. Reduce your spending, not life’s pleasures. Delivered weekly.

advertisement
Partner Center
advertisement

Connect with us