Love and Taxes: Tax Benefits of Marriage

When those wedding bells start ringing, phrases like “tax bracket” and “married filing jointly” are probably the last thing on your mind. However, once the couple eats the cake, the newlyweds toss the bouquet, and the next chapter of your life officially begins, it’s time to settle down and brush up on what love means for tax purposes.

Generally, most couples with average incomes will see some benefits by filing jointly rather than filing as married filing separately. These benefits are also extended to retirement plans because they offer various perks or opportunities for married couples to get a jump on retirement savings. 

Below are some unique tax considerations for married couples.

Your New Filing Status

A spouse isn’t the only “new” part of your life after your wedding. Depending on your tax approach, you’re also eligible for a different filing status. What does that mean? 

Understanding Filing Status Options

The Internal Revenue Service (IRS) establishes filing status based on your life situation. There are five options:

• Single.
• Married filing jointly.
• Married filing separately.
• Head of household.
• Qualifying widow(er) with dependent child.

More than one filing status may apply, but you have to choose one before you can finish your taxes. That’s because your filing status determines your tax rate — so you want to select the option that results in the lowest tax payments overall.

Choosing Your New Status

Before you’re officially married, you’ll likely have one of the following statuses:

• Single.
• Head of household.
• Qualifying widow(er) with dependent child.

Once you’re officially a married couple, you’ll give up your previous status and choose between: 

• Married filing jointly.
• Married filing separately.

For example, even if you were previously a married taxpayer and currently qualify for the widow(er) status, your new spouse puts you back in these categories. 

Now the only thing you have to do is decide whether to file jointly or separately. The best status depends on your unique situation, so be sure to chat about all the details with your spouse. For example, in some cases, in some cases, filing a joint return can get you a better standard deduction, but filing separately may help you write off certain medical expenses that wouldn’t otherwise qualify.

How To File

You don’t need to “report” these changes — just be sure you correctly list your new filing status. Because the IRS considered you married for the whole year, even if your wedding was on December 31st, you’ll use this updated information on your next tax return. 

Let’s say you forget to make this change (the way some people forget to use their new last name when signing things!). It’s not the end of the world: The IRS allows you to amend your return for up to three years after the original tax filing deadline. 

Marriage Tax Rates

Remember that your filing status determines your tax rate. However, your income also plays a role because that’s what influences your tax bracket.

Tax Rate vs. Tax Bracket

Although the terms may sound similar, tax rates and brackets are two different things:

• Rate: This is the percentage of your income that you owe in taxes.
• Bracket: This is a category you fall into based on your income; each category has its own tax rate ranging from 10% to 37%.

Keep in mind that both of these things can change when you get married, so it’s important to keep up with all those numbers.

Single vs. Married Taxes

There are different tax rates for individuals and married couples filing jointly. 

For example, a single person earning $50,000 per year in 2023 tops out at the 22% tax rate. Let’s say this person marries someone earning $30,000 annually. Their combined income is $80,000 — but they’ll top out in the 12% rate as long as they jointly file their tax returns. 

Why? The tax brackets for married couples filing jointly are bigger than those for single filers. Here are two examples:

Tax Rate	Single	Married Filing Jointly
10%	$0 – $10,275	$0 – $20,550
12%	$10,276 – $41,775	$20,551 – $83,550
22%	$41,776 – $89,075	$83,551 – $178,150

Married people can earn larger amounts of money and still stay in the same tax bracket. As such, filing a joint return often means you can make more and pay less. 

IRAs for You and Your Spouse

Individual Retirement Accounts, or IRAs, help you to make contributions towards your retirement. These accounts are often tax-deferred, which means you’ll pay taxes on the money when you retire (at which point you’ll likely be in a lower tax bracket — and if that’s the case you’ll end up paying less). You may also be able to take your after-tax income and put it in a Roth IRA; that way, you don’t have to pay taxes on it again later.

One of the eligibility requirements for making a contribution to an IRA is that you must have taxable income. Many types of income are taxable, but not all are eligible for placement in these accounts; for example, you may have to pay taxes on unemployment benefits, but that doesn’t mean you can put this money in an IRA.

So what happens if you’re married and only one of you has income that is both taxable and capable of being contributed to an IRA? That’s when an exception kicks in.

According to this workaround, the spouse who has taxable compensation is permitted to contribute to an  IRA account of the spouse without taxable income. This is called a spousal IRA, which, as our experts explain, “allows a working spouse to contribute to the retirement of a non-working spouse through an IRA.” To qualify for this exception, you have to be married and filing jointly.

Income Tax Credits and Deductions

All taxpayers, regardless of filing status, should know about tax credits and deduction options. 

Tax Deductions

There are two kinds of tax deductions: standard and itemized.

Standard

The IRS usually rewards all taxpayers with an automatic deduction on their taxable income. This is known as the standard deduction. Here’s what that looks like: 

Filing status	Standard deduction
Single	$13,850
Married, filing separately	$13,850
Married, filing jointly	$27,700

Notice that the first two filing statuses have a lower standard deduction. When you’re married and filing jointly, you can think of the larger amount as each of you receiving the standard deduction and combining it.

Itemized

If you choose an itemized deduction, you skip the standardized amount and instead list allowable expenses you incurred over the tax year. This may include medical costs, interest, charitable contributions, and more.

Naturally, the possibilities double when you get married; after all, you’ll have twice the expenses. This is especially good news if you manage to stay in your tax bracket, because you could be:

• Making more money.
• Paying a lower tax rate.
• Deducting more expenses.

As you continue your married life, you may have opportunities to write off expenses such as home mortgage interest, daycare for young children, or college expenses for older kids.

On top of all this, couples who file together often receive higher income thresholds for certain deductions. That means they can often earn a larger combined income and still potentially qualify for certain tax breaks. 

Tax Credits

Tax credits come in all shapes and sizes. They reduce the amount of tax you owe, while deductions reduce the amount of your income that is considered taxable. The best known are the Earned Income Tax Credit (EITC) and the American Opportunity Tax Credit. However, you may qualify for different credits when you get married and begin saving (and spending) in different ways.

Tax Benefits for Children

Many people in marriages are blessed with children. Sure, kids can be expensive — but the IRS has some tax benefits that can help with costs when raising dependents.

For the tax year 2023, the Child Tax Credit is worth up to $2,000 per qualifying dependent under age 17. This credit is currently partially refundable up to $1,600 — which means it could:

• Reduce your tax bill dollar-for-dollar.
• Allow you to get a tax refund.

There’s also the Child and Dependent Care Credit, a credit used to pay for expenses for the care of a child or dependent while you work (or look for work). The credit is:

• Up to $1,050 (35% of $3,000) for one child under 13.
• Up to $2,100 (35% of $6,000) for two or more children under 13.

While this tax credit cuts off when your kids are teens, there’s no age limit if you have disabled children.

Of course, having children and getting married costs far more than these tax breaks — but when it comes to paying taxes, you still want to get every tax deduction and credit you’re entitled to. 

Tax Tips for Other Income Tax Situations

What happens when your marital status also comes with a different earning type? Here are some examples of situations you or your spouse might bring to the table:

Self-Employment

When you’re self-employed, you’re responsible for different types of taxes. That’s because traditional employers pay some of your social security and Medicare taxes — but if you work for yourself, you’re responsible for the full 15.3%. This “Self-Employment Tax” is in addition to regular income taxes.

If you’re in this situation, you might have some questions — for example, whether you can still use the “married filing jointly” status. If you or your spouse are self-employed, you can still file jointly. 

Unemployment

While the choice is always up to you and based on your unique situation, it can often be helpful to file jointly, even if a spouse has no income. That’s because the spouse without income can still qualify for  certain deductions and credits.  If the spouse is getting unemployment benefits, that might be taxable as income and must be reported regardless of your filing status.

Get Your Income Taxes Done Right (No Matter How You File)

Filing jointly or separately? Taking the standard deduction or itemizing everything? Trying to juggle self-employment and a traditional job? No matter what your tax situation looks like as a couple, we’re here to help.

Don’t worry about knowing these tax rules. No matter what moves you made last year, TurboTax will make them count on your taxes. Whether you want to do your taxes yourself or have a TurboTax expert file for you, we’ll make sure you get every dollar you deserve and your biggest possible refund – guaranteed.