Marriage Tax Penalty Forum

[wingding]

also, for anyone complaining about the marriage penalty, you should calculate your taxes twice: Married filing jointly vs Married filing separately

It's always better to do married filing jointly. You will always pay either the same or higher taxes if you do married filing separately. Check out the current tax brackets and do a few hypos. You'll see that I'm right: http://www.bankrate.com/finance/taxes/tax-brackets.aspx.

People are complaining about the tax rate for single people vs. the tax rate for MFJ, not the tax rates for MFJ vs. MFS.

it's got more to do with deductions, than anything else.
Marriage penalty only comes into play once the combined income exceeds $148k, and looking only at the brackets, it climbs slowly,and only reaches approximately 2% of income when you hit the $395k or so.
Thereafter, the percentage grows steadily until you hit a combined $800k (4% of income), and thereafter it starts decreasing again.
That's not a lot of money, proportionally, and traditionally you would save significantly more because of shared expenses. There are also some tax benefits to being married, but that's a separate issue.
Admittedly, the times have changed, and not as many couples are tying the knot, but, it really isn't that big a deal.

[dixiecupdrinking]

Doesn't one spouse being on IBR/PAYE/etc potentially favor filing separately?

Alternatively: dying alone in a debtors prison.

[ookoshi]

it's got more to do with deductions, than anything else.
Marriage penalty only comes into play once the combined income exceeds $148k, and looking only at the brackets, it climbs slowly,and only reaches approximately 2% of income when you hit the $395k or so.
Thereafter, the percentage grows steadily until you hit a combined $800k (4% of income), and thereafter it starts decreasing again.
That's not a lot of money, proportionally, and traditionally you would save significantly more because of shared expenses. There are also some tax benefits to being married, but that's a separate issue.
Admittedly, the times have changed, and not as many couples are tying the knot, but, it really isn't that big a deal.

Looking only at the marginal tax rate is not the point. The bottom line tax liability is all that matters. As far as shared expenses, nothing is stopping you from sharing expenses without getting married, so sharing expenses is not really an additional benefit of being married.

It can and does end up being a big deal sometimes.