Is There A Tax Break For Marriage?

Marriage can result in tax benefits when filing jointly, such as lower tax rates for some couples and larger deductions for charitable contributions. Married couples can also receive the Married Couple’s Allowance, which can reduce their tax bill by between £427 and £1,108 a year. However, marriage does not always mean a tax break, and there are still marriage traps in the tax code.

For example, if both spouses work, any income over $139,350 is taxed at a 28% rate. If the same couple was still single, they could each earn up to $83,600 (for a total of $167,200) and still remain in the 25% tax bracket.

Married couples can also receive a variety of tax benefits, such as a lower tax rate, combined federal estate and gift tax limit, the possibility of a spousal IRA, and more room for tax breaks. The standard deduction for a single person or a person filing as Married Filing Separately is the same, with the standard deduction for married filing jointly being $12,950 for tax year 2022.1.

Married couples can also save income tax, minimize capital gains tax, and avoid inheritance tax. However, when filing separately, couples may pay a “marriage penalty” if they pay more income tax as a married couple than they would pay as unmarried individuals.

In summary, marriage can lead to tax benefits when filing jointly, including lower tax rates, estate tax advantages, and other tax benefits. However, couples should be aware of potential marriage traps and consider filing separately when filing separately.