If you got married last year, you’ll be checking the “married, filing jointly” box on your tax return. As a couple, your taxes will go up or down, depending on what each of you earns.
If one of you earns most of the income, you get a marriage bonus. Tax rates for couples are lower than tax rates for singles. Together, you’ll pay less than you did as an unmarried couple.
If you earn roughly the same income, however, you might pay what’s known as the “marriage penalty.” Even though your tax rates are lower, your combined incomes might put you into a higher bracket.
The penalty isn’t a sure thing. It depends on how close you are to reaching the next bracket. For example, say that you’re each in the 15 percent bracket. If your combined taxable incomes don’t exceed $70,700, you’ll stay in the 15 percent bracket. That means no penalty. You’ll benefit from the marriage bonus instead, says Julian Block, author of Tax Tips for Marriage and Divorce. If you jointly report more than that amount, however, that portion of your income rises to the 25 percent bracket.
If you discover that you will indeed be pushed into a higher bracket, ask your employer to adjust your W-4 withholding form. You’ll probably want more money taken out of your paychecks so that you can enjoy a refund instead of a tax bill next year.
(By the way, the marriage bonus and penalty aren’t in the tax code deliberately. They’re a mathematical consequence of a progressive tax system that raises tax rates on higher incomes.)
Married couples can file separately, but it rarely makes sense to do so. The cases usually cited include couples where one has huge unreimbursed medical costs, large casualty losses or other miscellaneous deductions. However, these write-offs are reduced by limits on other deductions and credits on separate returns.
If you married someone with young children, can you take them as tax dependents?
Only if you meet the following conditions:
(1) The child lived with you for more than half the year; (2) the child did not provide more than half of his or her own support (this would include child support paid by a divorced parent); (3) the child is not claimed as a dependent on anyone else’s tax return.
Remember that when you file jointly, you become liable for the entire tax. I’m sure that your new spouse is loving, fair, square and trustworthy – and that you checked it out before you said “I do.” If he or she is messing with the tax return, perhaps through unreported income or by manipulating small-business costs and revenues, you might be held equally responsible in the eyes of the IRS.