The IRS Apparently Really Wants You To Get Married

For a long time there was actually a disincentive to tie the knot when it came to taxes, sometimes referred to as the “marriage penalty.” Essentially what happened is that when two earners got married and became joint filers, they could be pushed into a higher bracket because their incomes were being added together.

This didn’t impact people in the 10% and 15% brackets, because the income amounts for these joint filers were exactly twice as big as the amounts for singles, but people in the 25% and higher brackets felt the burn because the joint filing thresholds for them were less than double the single threshold. In plain English: people in the 25% and up brackets were paying more as married people than as singles. Following tax reform, the tax situation for couples is looking different. The lower limit of all tax brackets for joint filers is now exactly double the lower limit for singles, the exception being if you are in the very top tax bracket. Meanwhile, a lot more people are going to be eligible for a marriage bonus. What’s that you ask? For couples who are earning two different incomes (and would be in two different brackets if single), the higher earner can get the benefit of the lower earner’s tax rate. Now, we know that anything tax related can make you want to hide under a couch and not come out again till the conversation has shifted to reality TV, but this is good news, at least as far as marriage is concerned (there are a whole other list of ways tax reform could impact your bottom line, though). Who would have thought you would get a better wedding gift from the IRS than you did from your grandmother?