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To my understanding, getting married does not automatically save you a lot on taxes. It depends on your financial situation. If, for example, you make $360k and

To my understanding, getting married does not automatically save you a lot on taxes. It depends on your financial situation. If, for example, you make $360k and your spouse makes $40k, it's going to be a win, because it works out to reducing your tax rate and increasing your spouse's. If you make $200k and your spouse makes $200k, it will be a wash because your tax rates are the same.

fibbery 13y ago
I'm pretty sure my partner and I will face a loss when we marry, because our combined incomes will push us into a higher tax bracket.
- sliverstorm 13y ago
  It's possible, because the tax code is complex, but married-filing-jointly has a lower tax rate. For example, let's assume you both have 40k taxable income: Single, taxable income 40k: tax is $5,935 Married, taxable (combined) income 80k: tax is $11,864 Double the tax on "single", because you would file two returns, and you get $11,870. So you actually saved $6! Taken directly from the tax table: http://www.irs.gov/pub/irs-pdf/i1040tt.pdf http://www.irs.gov/pub/irs-pdf/i1040tt.pdf
  - fibbery 13y ago
    Yeah, using these figures our married tax liability still ends up being more. I suspect because our incomes are very similar and there is a steep hike (5%) between tax bracket we would be in individually and the one that applies to us if we got married.
    - sliverstorm 13y ago
      Yeah, there are some nasty non-linearities in the tax rate. (Although you do know it is incremental tax rate, right?) My point was mostly that "in general" it's generally a wash.
TheCoelacanth 13y ago
Actually, if you each make $200k, you'll end up paying more taxes. Up to a combined taxable income of $146,400, two people making the same amount would pay the same amount of taxes whether or not they are married. Above that, they will pay more if they are married than if they are single.

fibbery 13y ago

I'm pretty sure my partner and I will face a loss when we marry, because our combined incomes will push us into a higher tax bracket.

sliverstorm 13y ago
It's possible, because the tax code is complex, but married-filing-jointly has a lower tax rate. For example, let's assume you both have 40k taxable income: Single, taxable income 40k: tax is $5,935 Married, taxable (combined) income 80k: tax is $11,864 Double the tax on "single", because you would file two returns, and you get $11,870. So you actually saved $6! Taken directly from the tax table: http://www.irs.gov/pub/irs-pdf/i1040tt.pdf http://www.irs.gov/pub/irs-pdf/i1040tt.pdf
- fibbery 13y ago
  Yeah, using these figures our married tax liability still ends up being more. I suspect because our incomes are very similar and there is a steep hike (5%) between tax bracket we would be in individually and the one that applies to us if we got married.
  - sliverstorm 13y ago
    Yeah, there are some nasty non-linearities in the tax rate. (Although you do know it is incremental tax rate, right?) My point was mostly that "in general" it's generally a wash.

TheCoelacanth 13y ago

Actually, if you each make $200k, you'll end up paying more taxes. Up to a combined taxable income of $146,400, two people making the same amount would pay the same amount of taxes whether or not they are married. Above that, they will pay more if they are married than if they are single.