Jophiel wrote:
Ironically, I just looked and I think I'm getting hit with a marriage penalty on my taxes versus my filings from my single days.
There is no such thing as a marriage tax penalty, unless one or both (typically both) of you have a low enough income to qualify for a sufficiently large EITC.
The "married filling jointly" column simply doubles the width of each bracket. So it'll look kinda like this:
tax_rate single married/jointly
5% 10k 20k
10% 25k 50k
20% 50k 100k
30% 75k 150k
40% 100k 200k
While the total taxable income may increase, the total taxes paid on your two salaries collectively is always going to be either equal to or less than that which you'd collectively have paid if you'd been single. Always (except for EITC, which doesn't take into account marriage status).
Aside from two very poor people (and there's a whole debate over that all by itself), any two people will typically gain significant tax benefits when they marry. Interestingly enough, that gain is in direct proportion to the degree of gap in their salaries. If two people with exact equal salaries marry, the resulting tax will be exactly the same as they'd have paid if they weren't married. But if two people with different salaries marry, they collectively gain a savings. The higher paid person is paying effectively half as much taxes on the money, but the lower paid person's salary doesn't bring the total up enough to double the money and therefore equalize the equation.
In a case where one person works and the other is unemployed, the working person's taxes will in most cases be exactly half as much as they'd have been as a single person. This is kinda relevant, right? If I'm shacked up with someone and supporting them financially as a single person, I pay X taxes. If I marry that person and support them, I pay .5X taxes.
There is an overwhelming tax benefit to marrying for most people.
Edited, Apr 9th 2009 2:27pm by gbaji