Newlywed Tax Hike: Will You Have to Pay More?
Less than two months from the tax-filing deadline of April 15, the Tax Policy Center has announced changes in tax code that mean you and your spouse could pay more if you earn similar incomes. Spouses who earn vastly different incomes, however, could pay less.
Fair? We don’t think so.
Thanks to January’s fiscal-cliff deal and last year’s now-in-effect health-reform law, existing marriage penalties have increased for wedded taxpayers. (Don’t speak tax-talk? Marriage penalties occur when spouses pay more as a couple than they would as individuals.) High-earning newlyweds are expected to feel the biggest effects of these changes – especially if your combined income amounts to more than $400,000.
While we know that taxes are one of the few certain things in life, we can’t help but think that these new monetary laws will actually discourage couples from tying the knot. Why pay more as Mr. and Mrs. when you can save money on your wedding and tax returns?
Want to see where you and your husband fall on the marriage bonus and penalties tax calculator? Check out the TPC information page here, then take a break from all of that number crunching with a much-needed glass of wine. Happy tax season!