A Guide to the Marriage Tax Penalty & Bonus

"I Do"... Affect My Taxes? A Guide to the Marriage Penalty and Bonus

When two people get married, their financial lives merge in many ways—including how they file their taxes. One of the most misunderstood aspects of this change is the concept of a **marriage penalty** or a **marriage bonus**. These terms describe whether a married couple pays more in combined federal income tax by filing jointly than they would if they had remained single and filed individually (a penalty), or if they pay less (a bonus). It's not a separate tax, but rather a consequence of how the U.S. progressive tax brackets, standard deductions, and certain tax credits are structured for different filing statuses.

Whether a couple experiences a penalty or a bonus depends almost entirely on how their individual incomes compare to each other. An interactive calculator for this topic is not provided because an accurate calculation requires a full understanding of each person's entire financial picture, including all sources of income, deductions, and potential credits—a task best suited for tax software or a professional. This guide, however, will explain the principles behind why this effect occurs.

Why Does This Effect Happen? Tax Brackets and Deductions

The U.S. tax system is progressive, meaning higher income is taxed at higher rates. The system has different tax brackets for 'Single' filers and 'Married Filing Jointly' filers.

• Tax Brackets: The tax brackets for Married Filing Jointly are *not* simply double the size of the Single brackets. For lower incomes they are, but for middle and higher incomes, the married brackets are less than double the single brackets.
• Standard Deduction: The standard deduction for Married Filing Jointly ($29,200 in 2024) is exactly double the Single deduction ($14,600 in 2024). This part of the tax code is marriage-neutral.

The penalty or bonus arises from how a couple's combined income fits into these differently sized brackets compared to how their individual incomes would have fit into the single brackets.

Who Gets a Marriage Bonus? (The "Traditional" Earner Model)

A **marriage bonus** typically occurs when there is a significant difference between the two spouses' incomes.

Example: Consider a couple where one spouse earns $120,000 and the other earns $0.

• If Single: The high-earning spouse's income would be taxed in several brackets, with some of it falling into higher tax brackets (e.g., 24%). The other person pays no tax.
• If Married Filing Jointly: Their combined income of $120,000 is now spread across the wider married tax brackets. This effectively 'pulls' some of the higher earner's income down into the lower tax brackets, resulting in a lower overall tax bill than the sum of what they would have paid individually.

Who Gets a Marriage Penalty? (The Dual-Earner Model)

A **marriage penalty** typically occurs when both spouses earn similar incomes, especially at middle-to-high levels.

Example: Consider a couple where both spouses earn $90,000 each.

• If Single: Each person's $90,000 income would be taxed according to the single filer brackets. A portion of their income would fall into the 10%, 12%, and 22% brackets.
• If Married Filing Jointly: Their combined income is $180,000. When this combined income is applied to the married brackets, the fact that the higher brackets are *less than double* the single brackets means that more of their combined income gets 'pushed up' into a higher tax bracket (the 22% or even 24% bracket) than would have happened if they had filed as two separate individuals. This results in a higher total tax bill.

Is It a Reason to Not Get Married?

For the vast majority of people, the tax implications of marriage are relatively small and should not be a primary factor in such a major life decision. The tax code is complex, and the penalty or bonus can also be affected by eligibility for certain credits (like the Earned Income Tax Credit) or limitations on deductions (like the State and Local Tax deduction). The best approach is to be aware that your tax situation will change and to consult with a tax professional or use reputable tax software to understand your specific circumstances after marriage.