Tax benefits of marriage
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Updated: January 02, 2024
Marriage is a big step, especially when it comes to your finances. Tax benefits are among the many things couples should discuss when they decide to tie the knot.
If you're thinking about getting married, consider the financial implications. And don’t forget to look at how “till death do us part” might impact your tax bill. There are some tax benefits of marriage, including tax breaks for married couples. But there are also some tax penalties that occasionally crop up.
What are the tax benefits of marriage?
Marriage comes with some tax benefits, depending on your situation. Here are some of the main advantages that come when you get married and file jointly:
Lower combined tax bracket
If your spouse has a much lower income than you, it could result in being in a lower combined tax bracket. Most tax brackets are much wider for joint filers, so you might be able to stay in a lower tax bracket with your combined income than you would be if you filed separately. This could reduce your overall tax bill.
Spousal IRA contributions
If one partner isn’t working, they might not be able to make IRA contributions on their own. However, a spouse can make contributions to a non-working partner’s IRA. It’s possible to increase your joint retirement savings and take advantage of the associated tax benefit.
Benefit shopping
When you’re married, you have access to different benefit structures from work. This allows you to compare different options, including flexible spending accounts (FSA) and health savings accounts (HSA).
You might not have access to certain benefits through your job, but your spouse may have benefits you can use. Some of these benefits come with certain tax advantages, and as a married couple, you can assess what works best for you.
No tax consequences for giving
In general, when you give someone else money, you have to pay taxes on amounts exceeding the IRA gift tax exemption. However, there is no limit to how much you can give your spouse, even if your finances are managed separately. This allows you to give any amount of money.
Avoid the estate tax
Spouses can avoid the estate tax when one of them dies. If your spouse passes, their assets become yours (as long as you’re the beneficiary) and your joint assets remain yours, without the worry of paying the estate tax. When you pass on, your heirs will need to handle the estate tax, but it makes life easier for married partners.
File only one tax return
As a married couple filing jointly, you can save on time and expense by only filing one tax return. If you pay someone else to prepare your taxes, filing only one return saves money.
If you and your spouse file separate tax returns, you'll need to coordinate your deductions and credits, as well as who’s claiming any dependents. Because the government allows married couples to file taxes jointly, sending only one return makes this process a little easier.
Tax breaks for married couples
It’s worth noting that many of the tax breaks for married couples come in the form of higher phase-out thresholds for deductions and credits, as well as wider tax brackets. Some of the bigger tax breaks you can get when married and filing a joint return include:
- Higher standard deduction
- Bigger charitable contribution deduction
- A higher threshold for phase-outs on the student loan interest tax deduction
- Higher contribution limit for the HSA
- Higher threshold for phase-outs on the child tax credit
When you consider the tax benefits of marriage, pay attention to the phase-out levels of different tax breaks and determine whether getting married could help you take advantage of various tax breaks. To make sure you’re applying the right tax break and getting all of the tax deductions you can, consider using a tax preparer like H&R Block, Cash App Taxes (formerly Credit Karma Tax), or TurboTax. Here's a quick comparison of the three:
| Highlights | TurboTax | H&R Block | Cash App Taxes |
|---|---|---|---|
| Tax preparation plans & prices | Free: $0; Deluxe: $69; Premier: $99; Self-employed: $129; State returns: $59 on each plan above, but $0 on the Free plan | Free online: $0; Deluxe: $29.99; Premium: $49.99; Self-employed: $84.99; State returns: $36.99 on each plan above, but $0 for Free Online | For for all returns |
| Free version? | Yes For simple tax returns only | Yes | Yes |
| Customer support | 24/7 online and by phone | Unlimited live chat, as well as phone | Limited to online help center, no live support provided |
| Live tax preparation option & cost | TurboTax Live: Free: $99; Deluxe: $139; Premier: $189; Self-employed: $219; State returns: $54-$64 on each plan above | Online Tax Assist: Basic: $39.99; Deluxe: $69.99; Premium: $109.99; Self-employed: $144.99; State returns: Free with Basic, $36.99 each for other plans | Not offered |
| Import data from other software? | Yes | Yes | Yes |
| Business tax services | Prepare W2s and 1099s, and Partnership Returns | Prepare W2s and 1099s, and Partnership, Corporation and S corporation Returns | Not offered |
| Refund tracking? | Yes | Yes | Yes |
| Sign up | Sign up | Sign up | Sign up |
| Reviews | Read our TurboTax review | Read our H&R Block review | Read our Cash App Taxes Prep review |
Tax penalties for married couples
Even though there are tax benefits of marriage, there are also some circumstances in which being married could actually result in a penalty.
Similar income
One of the biggest examples is in the case of two high-earning partners who have similar incomes. When such a couple gets married and files jointly, some of the tax benefits of marriage might be reduced. For the most part, though, such a penalty is unlikely to kick until a couple has a joint income of at least $693,750.
Household status claiming
There are other ways a penalty might manifest, such as in a situation where a couple might be able to have a lower overall tax bill if one partner could claim head of household filing status while the other claimed single filing status.
- In a household where unmarried partners have children, check whether it may be beneficial for one person to file as head of household while the other files as single.
- Run some scenarios to determine your overall tax bill in different situations before deciding whether it makes sense to get married for tax benefits.
- Keep in mind that in order to claim head of household status, you have to be legally separated or divorced. Separated couples can’t live together for the last six months of the year if one wants to claim head of household.
Other potential tax downsides to getting married
There are a few other potential issues around marriage, even if there are some benefits of the married filing jointly. Some items to be aware of include:
- You’re equally responsible for the tax return, so you’re responsible for your spouse’s mistakes, including if you end up owing more money. You can apply for innocent spouse relief if you can prove that you didn’t know about an issue, but that can be a time-consuming process.
- If your spouse has some sort of garnishment against their paycheck, such as for child support, back taxes, or a loan, the joint tax refund could be blocked and used to pay the outstanding amount.
- You might have a harder time reaching searching thresholds for certain itemized deductions, such as the medical expenses deduction.
Can I file as single if I am married?
If you’re married, you can choose to file separately or jointly. While there are benefits of married filing jointly, there are also good reasons to file your taxes separately. For example, if you’re concerned that your spouse might be cheating on their taxes and you don’t want to be held responsible, it can make sense to file separately.
Pay close attention, though, because there are some situations in which phase-out thresholds and other items are different for those who are married but filing separately and a single filer. Some credits — like those for childcare expenses or the earned income credit — are only available for those who file joint returns.
Generally, if you’re married, you must file as married filing jointly or married filing separately. There are some instances when you might be able to claim head of household status if you’re separated and not yet divorced, but you usually can’t file as single.
Final thoughts
Depending on the situation, there are many tax benefits resulting from marriage. If you’re thinking about tying the knot, consider how getting married might impact your tax bill. Run different scenarios and then decide whether it makes sense to get married in order to get the tax breaks reserved for married couples.
Miranda Marquit is a journalism-trained freelance writer and professional blogger specializing in personal finance.
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