Are tax rates higher if you get married?
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It might be the last thing on your mind, but the fact is that if you get married, there’s a possibility your tax rates could go up.
The marriage penalty
Historically, married couples filing jointly did see an increase in their tax rates for several reasons. First, by combining their income, a husband and wife would sometimes find that they were pushed up into a higher tax bracket than an individual filer making the same money. Second, if the taxpayer used the standard deduction, the tax break for single filers was sometimes greater than for married couples. The government’s rationale: Two people living together enjoy economies of scale not available to individual filers living in separate households. While some couples still face the so-called marriage tax penalty, changes to the lower-income brackets and standard deductions have eased the penalty.
The marriage penalty still exists for some couples whose combined income pushes them into the highest tax brackets and therefore requires them to pay higher tax rates than if they had filed separately. However, other couples have found that they are benefiting from the so-called marriage bonus. That bonus generally occurs when there is a wide variation between the incomes of each spouse.