You didn’t invite Uncle Sam to your wedding, but he crashed your big day anyway. Chances are, however, you likely won’t know the effects of his participation until you file your first tax return as a married couple.
For June brides and grooms, as well as all couples who said or will say “I do” this year, here’s a look some ways your taxes could change.
A different filing status. Now that you’re an official, legal duo, you no longer can file your tax returns as single taxpayers. This is the case as long as your vows were exchanged anytime in the tax year, including the very last day. If you are legally married on Dec. 31, the IRS considers you married for the full tax year.
As a married couple, you have two wedded filing status choices, jointly or married filing separately. Generally, filing one Form 1040 jointly will provide lower taxes. Sometimes, though, married spouses fare better (or at least one spouse does) when they opt to file two separate returns. My post Separate tax return filing considerations for married couples has more on these situations.
A new income tax rate. A variety of factors affect your eventual tax bracket and income tax rate. For newlyweds, however, one is easy to see. If both spouses work, their combined income could push them into a higher tax bracket. Check out the 2024 tax brackets to see where your dual earnings will fall.
Of course, your partner might bring new deductible expenses, which brings us to the next potential marital tax change.
Itemizing vs. taking the standard deduction. Thanks to current tax law, the Tax Cuts and Jobs Act of 2017 whose individual provisions run through 2025, the tax brackets for most filing statuses are essentially doubled. This means most taxpayers, including couples who file jointly, will be better off claiming the standard deduction rather than itemizing deductions.
But, since taxes are so personal, your or your new spouse’s financial and tax circumstances could mean you would be better off totaling your itemized expenses on Schedule A. Take a good luck at filing time, because you also may lose some tax breaks if your combined income now exceeds an eligibility threshold.
A marriage tax or bonus. Your overall tax situation also could produce a marriage tax or marriage bonus. The names are self-explanatory. Jointly filing couples face the marriage tax when they owe more in taxes than they would have if they each had filed as single individuals. A marriage bonus goes to married joint filers who pay less in taxes than they would have as single taxpayers.
Again, thanks to the 2017 tax reform law, tax brackets for joint filers compared to single filers were basically doubled for all but those in the top 37 percent bracket. This has meant that most couples now are more likely to collect a marriage bonus rather than pay a marriage tax penalty. If that is your case, consider it Uncle Sam’s belated wedding gift when your file your return next year.
If the reverse is true, in most cases there’s not much couples can do about a marriage penalty. But you still have each other, and that vow to stick together through better or worse applies to difficult tax situations, too.
You also might find these items of interest:
- A tax to-do list after you say 'I do'
- After "I do," say "I donate" my wedding dress
- 4 tax-smart ways to give back on your wedding day
- His? Hers? Does the name listed first on a joint tax return define your marriage?
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