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How expiring Bush tax cuts will affect you

Marriage's tax cost increases
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Marriage's tax cost increases

Some taxpayers' filing status also could be more costly next year.

Before 2001, some married couples who filed a joint return on their combined incomes paid more taxes than did two individuals who each earned the same amounts as the husband and wife but filed separate 1040s as single taxpayers.

This filing phenomenon was known as the marriage tax penalty.

The Bush tax cuts helped ease this inequity. "As part of the 2001 act, the 15 percent tax bracket was made larger to eliminate the marriage penalty," says Mark Luscombe, principal tax analyst for CCH.

In 2011, though, that could change. "The size of the 15 percent bracket for joint filers would shrink," says Luscombe.

The bottom line: The marriage tax would be back.


 

 

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