Tag Archives: marriage penalty

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GOP Tax Plan: Tax Brackets for Married Couples

More details of the GOP tax plan have leaked, and the new tax brackets look enticing (other than that we won’t have the funds to support infrastructure needs in the country) — on an individual level, even with the marriage penalty on the SALT deduction ($10k can be deducted per individual OR $10k per married couple), the actual brackets are promising in removing the marriage penalty for everyone except those who make over $600k as married filers. Continue reading

Our Marriage Tax Penalty: How It Played Out

There is a lot of misinformation about the marriage tax penalty. While it’s true if one spouse doesn’t work and the other makes any amount of income, the couple will get a “marriage bonus,” once both partners are working and making enough income to live, esp in a high-cost-of-living area, the tax penalty is going to kick in.

The worst marriage penalties are seen when you have kids and lose deductions based on income, but I’m going to share in simple terms why we received a marriage penalty this year – this beautiful first year of our marriage – due tour income.

Federal Taxes Only (State marriage penalty not included below)

Mrs. HECC
Income: $195,000
Single Filer Tax: $47,749.25

Mr. HECC
Income: $105,000
Single Filer Tax:  $22381.75

  • Total Couple “Single” Federal Tax: $70131
  • Married Filing Jointly Tax: $74,217

And, just in case you’re wondering, it is not better to “file separately” as a married couple — this is not the same as filing single (which you can’t do when you’re married.)

Married Filing Separately:

Mrs. HECC

Income: $195,000
Single Filer Tax: $51,958.50

Mr. HECC
Income: $105,000
Single Filer Tax:  $22981.25

Total Married Filing Separately:  $74939.75 

As you can see, if you have somewhat higher incomes, the marriage tax penalty will be quite notifiable.

If we never got married… $70,131 in taxes
Marriage Fine (Filing Jointly)  +$4086
or, Marriage Fine (Filing Separately) +$4808.75

This plays out similarly in state taxes.

Yes, we’re fortunate enough to be high-income earners – but we also cannot afford a house. So there’s that.