doesn't marriage cost you more income tax?

[Goldy1]

I love being married. One of the other threads someone was talking about tax advantages of getting married. I thought you paid more in tax being married in many cases. I am all for paying my fair share , but just saying. Ok so one recent year dh made about 40 K (he puts max alot in 401K so this is after that) and I made about 18 K working p/t. If I was single I doubt I would pay a lot of tax on that! WE did also have some interest income. (though I would work more hours if single) no kids to write off that year but will have one for 2009 taxes. we have little left on our home mortgage so we took standard deduction and did not itemize.

I was just thinking about it b/c I plan to possible stay home for at least a year or two after child is born and figured with my "relative low wage" and being able to claim the kid we won't suffer too much. I love working and can't wait to return. I have experience in about 3 fields so I should find something even if it takes time.

[jIM_Ohio]

This depends on situation. In low tax brackets I think you would pay less being married than single. Rich people might find it more advantagous to stay single for some cases.

depends in every case.

[disneysteve]

Didn't they eliminate the marriage penalty a few years back?

[jIM_Ohio]

Didn't they eliminate the marriage penalty a few years back?

Only in two lowest brackets

[sweeps]

Yeah, it depends. It's usually more beneficial to be married when the couple has drastically different incomes. For example, a man making $150,000 a year and his wife making $10,000 a year will typically do better married than single. When the couple's incomes are similar typically they will fare worse married than single.

[moneybags]

Yeah, it depends. It's usually more beneficial to be married when the couple has drastically different incomes. For example, a man making $150,000 a year and his wife making $10,000 a year will typically do better married than single. When the couple's incomes are similar typically they will fare worse married than single.

I'm thinking if the woman, unmarried, has a low income & a child, she can qualify for the earned income credit & take the child tax credit. The man's earnings at $150,000 would disallow the credits. I would think it would be more tax beneficial in that case to remain "single".

[Goldy1]

I guess it just depends. I suppose I may say that if I make 18 to 25K for example I would pay less taxes on MY income being single as opposed to being married to a man making 50K. However, if he were to remain single I suppose he may pay more on his earnings than having a wife b/c there are 2 of us. Not sure.
It's another topic but we always run the tax forms filing jointly and separate also to see where it works out better in our favor(although that is not the same as married or not.

I always thought of it in term son wha tI pay in taxes but never thought about him also.

[MonkeyMama]

I'm thinking if the woman, unmarried, has a low income & a child, she can qualify for the earned income credit & take the child tax credit. The man's earnings at $150,000 would disallow the credits. I would think it would be more tax beneficial in that case to remain "single".

But the $150k taxed TWICE as much at single. EIC won't begin to make up for that.

Better off married, as a whole.

[MonkeyMama]

Reminds me, my spouse and I consider our money as one. So I can't quite wrap my brain around one tax client I have. Doctor grossed $500k & wife teacher grossed $30k. I tell them they just have to max out their 401ks, but teacher doesn't want to because it is HALF of her income. But they pay like an extra $5k in taxes because of it.

I told her to max out her 403b then and have her husband give her $15k. Yeesh. (It's rare I get a client who argues they want to pay more to the IRS - particularly in that tax bracket!)

That example just popped into my mind. It is kind of interesting when there is such a pay gap.

Anyway, marriage penalty was largely removed for the middle class, the last decade. IT generally makes little difference. Until you get into higher tax brackets, as mentioned.

[disneysteve]

Reminds me, my spouse and I consider our money as one. So I can't quite wrap my brain around one tax client I have. Doctor grossed $500k & wife teacher grossed $30k. I tell them they just have to max out their 401ks, but teacher doesn't want to because it is HALF of her income.

That is our situation (except for the 500K income ). I earn about 7-8 times what my wife earns. We have 50% of her income going into her 401k. We actually wanted to put 100% in but 50% was the limit. We also max a Roth for her and did so even when she wasn't working, so it was my earnings going into her account, but we also consider all our money as one.

[Goldy1]

We consider our money as one also. We are both responsible and communicate before making a big purchase. It kind of has helped me making less in the sense b/c I base my purchases on my income even though if I wanted I could take more out of the bank and "spend his"

I know a couple who are separate on money and will say things like "are you paying for this dinner out??" All the money is YOURS when married, but I guess it's just personality differences.

[jIM_Ohio]

But the $150k taxed TWICE as much at single. EIC won't begin to make up for that.

Better off married, as a whole.

MM is trying to say the right thing, but this reads wrong- I think.

Married will pay HALF of the taxes as single at 150k.

Meaning 28% of 150k is 42k
15% of 150k is 22.5k

EIC on 10k single would be ~$400 (no kids), ~$2900 (one kid), ~$4000 (two kids).

Get a 4k credit for one spouse and pay $20k MORE in taxes for the other.

all numbers above are estimates.