Should I Get Married for Tax Reasons?

Marriage is a significant life event with broad implications for personal finances and tax obligations. The tax impact of marriage is highly individualized, depending on each couple’s financial situation and income structure. This article explores how marital status influences federal income tax responsibilities.

Filing Status and the Marriage Tax Effect

Upon marriage, couples generally gain the option to file their federal income taxes as “Married Filing Jointly” or “Married Filing Separately,” differing from the “Single” filing status previously used. The Married Filing Jointly status typically combines the incomes, deductions, and credits of both spouses onto a single tax return. Conversely, Married Filing Separately requires each spouse to file an individual return, reporting only their own income, deductions, and credits.

The structure of federal income tax brackets for married couples filing jointly is generally double that of single filers for the lowest tax brackets. For instance, in the 2024 tax year, the 10% tax bracket for single filers applied to taxable income up to $11,600, while for married couples filing jointly, it extended up to $23,200. Similarly, the 12% bracket for single filers covered income from $11,601 to $47,150, whereas for joint filers, it ranged from $23,201 to $94,300.

This doubling of bracket widths can lead to what is known as a “marriage bonus” when one spouse earns significantly more than the other. For example, if one spouse earns all or most of the household income, their combined income may fall into lower tax brackets than if they were taxed as two single individuals earning disparate incomes. The joint tax return effectively allows the higher earner to utilize the lower tax rates of the spouse’s unused bracket capacity.

Conversely, a “marriage penalty” can occur when two individuals with similar high incomes marry. In such cases, their combined income might push them into a higher tax bracket than they would have been in as two single filers. For instance, if two single individuals each earn an income that places them in the middle of a tax bracket, their combined income after marriage could push a portion of their earnings into a higher marginal tax bracket.

Changes to Deductions and Tax Credits

Marriage can significantly alter the availability and value of tax deductions and credits. The standard deduction, a fixed amount that reduces taxable income, changes for married couples. The 2024 standard deduction for married couples filing jointly is $29,200, twice the $14,600 for single filers. This straightforward doubling often makes the standard deduction advantageous for many married couples, simplifying their tax preparation.

However, circumstances may arise where itemizing deductions becomes more or less beneficial after marriage. Itemized deductions allow taxpayers to subtract specific expenses, such as mortgage interest, state and local taxes, and charitable contributions, from their taxable income. If the combined total of a couple’s eligible itemized deductions exceeds their joint standard deduction, they would typically opt to itemize.

Marriage also impacts various tax credits, which directly reduce a taxpayer’s final tax liability. The Child Tax Credit, for instance, is worth up to $2,000 per qualifying child in 2024. This credit begins to phase out for married couples filing jointly with a modified Adjusted Gross Income (AGI) exceeding $400,000, compared to a $200,000 threshold for single filers. Combining incomes post-marriage could cause a couple to hit these phase-out thresholds, reducing or eliminating the credit.

The Earned Income Tax Credit (EITC), designed for low-to-moderate income working individuals and families, also has different income thresholds for married couples. In 2024, the maximum AGI for married couples filing jointly to qualify for the EITC ranges from $25,511 with no children to $66,819 with three or more children. These thresholds are higher than for single filers but combining two incomes upon marriage might still push a couple beyond eligibility.

Education credits, such as the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC), are also affected by AGI limits that vary by filing status. In 2024, the AOTC begins to phase out for married couples filing jointly with a modified AGI between $160,000 and $180,000, compared to $80,000 to $90,000 for single filers. The Lifetime Learning Credit also phases out for joint filers with a modified AGI between $160,000 and $180,000. Combining incomes can elevate a couple’s AGI, potentially reducing or eliminating these valuable education tax benefits.

Other Tax-Related Financial Considerations

Beyond income tax brackets, deductions, and credits, marriage can influence other tax-related financial aspects due to changes in combined Adjusted Gross Income (AGI). For example, the taxation of Social Security benefits is determined by a taxpayer’s provisional income, which includes half of their Social Security benefits plus other taxable income. For married couples filing jointly, up to 50% of benefits may be taxable if their combined income is between $32,000 and $44,000. Up to 85% of benefits may be taxable if their combined income exceeds $44,000. Combining incomes after marriage can push one or both spouses into these taxation thresholds for their Social Security benefits.

The deductibility of student loan interest also has income limitations. In 2024, the maximum $2,500 student loan interest deduction begins to phase out for married couples filing jointly when their modified AGI is between $165,000 and $195,000. If a couple’s combined income surpasses these limits, their ability to deduct student loan interest may be reduced or eliminated.

Eligibility for Roth IRA contributions is another area affected by combined income. In 2024, the ability to make a full Roth IRA contribution phases out for married couples filing jointly with a modified AGI between $230,000 and $240,000. Exceeding these thresholds due to combined incomes can prevent a couple from contributing to a Roth IRA, potentially impacting their retirement savings strategy.

Eligibility for Affordable Care Act (ACA) premium tax credits or subsidies is based on household income relative to the federal poverty line. While specific income limits vary annually and by household size, combining incomes through marriage could elevate a couple’s household income, potentially reducing or eliminating their eligibility for these subsidies.

The Net Investment Income Tax (NIIT), a 3.8% tax on certain investment income, applies to individuals with modified AGI above specific thresholds. For married couples filing jointly, this tax applies if their modified AGI exceeds $250,000. Combining investment income and other earnings after marriage could subject a couple to this additional tax on their investment earnings.