Hello, I was looking at the tax tables from last year and it appears to me that there is NO marriage penalty when a married couple files separately and each person's income is under $69,700. The amount of tax is the same number whether single or filing separately for all incomes below that level.

Is there something I missed here? Are there other factors?

Hello, I was looking at the tax tables from last year and it appears to me that there is NO marriage penalty when a married couple files separately and each person's income is under $69,700. The amount of tax is the same number whether single or filing separately for all incomes below that level.

Is there something I missed here? Are there other factors?
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There is generally not much of a marriage penalty, anymore. And that's true through the end of 2012, as it stands now.

As you may have read, that may well change for 2013 IF CONGRESS FAILS TO ACT, and extend the "Bush-era" tax cuts of 2001 in some fashion, including that.

I've always said the biggest marriage penalty isn't in the income tax law, but the Social Security laws, that cut benefits for a widow who remarries, if she had low earnings of her own.

Bill

Are there other factors?

While the tax rates were equalized to a point, there are a number of other "penalties" for MFS filing status, the most notable being ineligibility for the Earned Income Credit and a Roth contribution phaseout range that begins at $1.

Phil
Rule Your Retirement Home Fool

Thanks for the replies so far. Specifically regarding two married people filing separately who earn less than $69,700 using standard deductions and nothing unusual, am I correct in reading that it won't be any different than not being married?

Specifically regarding two married people filing separately who earn less than $69,700 using standard deductions and nothing unusual, am I correct in reading that it won't be any different than not being married?

No, it will certainly be different from not being married. If you are married you no longer have the option to file Single. You can file Married, Filing Jointly or Married, Filing Separately. What would have been were the couple not married is moot.

We may be going at this backwards. Why are you asking? It almost sounds like taxes are a factor in deciding whether this particular couple will marry. In that case, Phil the grizzled observer of way too much marital drama, suggests don't.

Phil
Rule Your Retirement Home Fool

...sounds like taxes are a factor in deciding whether this particular couple will marry.

Given this is November already, maybe it's just the deciding factor on whether to swing by the Justice of the Peace shortly, or wait until January.

...Is there something I missed here?...

Be sure to also check your state taxes to see what the impact will be.


Getting married also starts the clock on the ten years of marriage that sometimes counts in the social security rules.