Article Bookmarked
Bookmark Removed

Tax Day: Are You Receiving a Marriage Penalty or Bonus?


Apr. 15, 2015 New York Times

In most wealthy countries, married people file separate income tax returns, reporting their individual income, just as they would if they were single. But, in the United States, a system of joint tax returns results in a marriage penalty for some, and a marriage bonus for others.

The marriage penalty is the additional taxes that couples pay when filing jointly, compared to what they would pay if each person were allowed to filed individually. The penalty stems mostly from the fact that tax rates rise as income rises — and the brackets for married people and single people are different.

Yet the penalty is far from uniform. Some couples pay a much steeper penalty, and many actually receive a bonus for being married.

The largest marriage penalties fall on couples on either end of the income spectrum — poor or affluent — as well as on couples in which the two people are making similar amounts of money. Childless couples in the broad middle of the income spectrum,  making between $40,000 and $175,000, tend to receive a marriage bonus instead, paying less in taxes than they would if they were filing separately.

Nick Kasprak, a developer at the Center on Budget and Policy Priorities, and Kyle Pomerleau, an analyst at the Tax Foundation, have calculated marriage penalties or bonuses for thousands of hypothetical couples with total wages between $10,000 and $1 million.

In marriages without children, the largest bonuses, in percentage terms, occur when couples have income just under $100,000 and only one earner. These couples pay about 7 percent of their income, or $7,000, less in taxes than they would if they were forced to file as two single individuals.

The largest marriage penalties are for those who earn around $17,000, split evenly. These couples pay about 4 percent of their income, or $700, more in taxes than they would if they were allowed to file as two single individuals.

Read More on New York Times

Gene Upshaw Player Assistance Trust Fund

Apply Today

All Resources

Tell Me More

Tips for Achieving Your Financial New Year’s Resolutions in 2021

The new year can be a good opportunity to refocus financial goals.

Read More

How to Collect a Missing Stimulus Payment

Verify it is coming and ensure the connected account is up to date.

Read More

How to Complete an End-of-Year Debt Assessment

The new year is a great time to take stock and take action.

Read More

21 Smartest Money Moves to Make in 2021

Thinking about financial resolutions for 2021? Start here.

Read More

3 simple steps to jump-start your heart health this year

This is the year to consider "Life's Simple 7."

Read More

Walk Off Your Anxiety

When you're anxious and stressed, exercising can do wonders.

Read More

9 Trends That Will Shape Work in 2021 and Beyond

Interested in how your company may be impacted moving forward?

Read More

Remembering MLK Jr.

Today reminds us that progress towards equity and unity takes strength and perseverance.

Read More