Posted by Fletcher Accounting and Tax Service Inc.

Does Your State Have Marriage Penalty?

Does Your State Have Marriage Penalty?

What exactly is a marriage penalty? Marriage penalty is an increased burden or else pressure on a married couple as compared to the time when they were single. In the united states a study conducted revealed that married couples had to pay a high amount of tax as compared to the ones who are single. 

Although, the united states of America has tried a lot to improve the rules of marriage penalty, it still exists and married couples have to pay the marriage penalty as well. 

Marriage penalty is payable when two individuals have different sources of income marry with each other. The amount of income does not matter as both the husband and the wife have to pay the marriage penalty regardless of the income that they earn. 

However, on the whole, marriage penalties are only obligatory on those couples whose total income is high enough that they can pay this amount. For couples with extremely low incomes, they are exempted with this obligation. 

Marriage penalty tax

It is true that marriage penalty tax is a harsh reality for couples who have to pay it along with so many other taxes which are applicable in the country that they are living in. the government is smart enough to impose the marriage penalty tax in order to collect more and more taxes. The government takes full advantages of the marriages that people are doing. 

However, if you have an ideal kind of income, it is possible that it will not be a great deal of worry or bother to pay the marriage penalty. If you earn a total of 110000 dollars, and have a child to take care of, you can claim the thousand dollars as the child tax credit. If you also have a home which you have bought on mortgage it will lessen up your tax burden as well. The bottom line is that if you earn an income which is around 100000 dollars, you might not have to pay the marriage penalty tax instead there is a huge possibility that you can even be eligible for the marriage tax credit. 

The worst thing that can happen 

Love is blind, and when you love someone you do not look at their incomes or how much they earn instead you just fall in love with that person. The worst case can occur if a couple who both earn very low-income fall in love and get married. The couple will still have to pay the marriage penalty tax and there will be no ease for them.

Apart from that, if a low income earner marries a high income earner, a great amount of tax will be applicable for the low income earner as well. This can lead to a lot of problems for the low income earner as his/her income cannot possibly allow her to pay a tax more than what they earn obviously!

Reading all this gives the thought that it is better off not to marry. However, being legally married can also have some great benefits for the couple. If you die, then your surviving family member or your spouse get easily get the social security benefits when they will be distributed. 

This way, if any one of the spouse dies, the first thing which the surviving spouse has to do is to contact the required authority and demand for the social security benefits which there spouse has left behind. This can be a great advantage specially if the couple had children and funds were needed to invest in their education. 

This can also be a great advantage if the spouse who used to earn a low income died. All the social security benefits can then be claimed and used by the family members. 

Wrapping up

It is true that marriage penalties can be a great burden for the couples to bear specially if their income is not exceptionally good. However, living in a country where there are strict laws and regulations, the couple has to follow these rules. 

If you marry legally, you will definitely have to pay the marriage penalty tax and there is absolutely no way that you can avoid it. 


Fletcher Accounting and Tax Service Inc.
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