Should I Get Married for a Better Tax Status?
Many of our self-employed and small business owner clients ask us about tax implications of getting married. Marriage is a life-changing decision, and it’s essential to consider how it impacts your financial and tax situation. Depending on your circumstances, getting married could simplify your taxes—or increase your tax burden. Here are key points to keep in mind:
Marriage and Tax Filing Options
Your being married on December 31 determines your tax filing choices:
- File jointly, combining income, deductions, and credits
- File separately, using married-filing-separately status
Most couples file jointly for simplicity and financial benefits, but this may not always be the best choice.
Potential Tax Negatives of Marriage
- Marriage penalty. Couples with high combined incomes may face higher tax rates than if they were single. For instance, the 37 percent tax rate applies to income over $731,200 for joint filers but $609,351 for singles.
- Joint liability. Filing jointly means both spouses are fully responsible for tax debts, even for errors or fraud committed by the other spouse.
Filing separately avoids joint liability but often disqualifies you from valuable tax breaks and can result in higher tax rates.
Tax Breaks at Risk When You Get Married
Your combined income as a married couple could reduce or phase out eligibility for certain tax breaks, including:
- The child tax credit
- Education credits
- The qualified business income (QBI) deduction
- The marriage bonus
Not all couples face higher taxes after marriage. If one spouse earns most or all of the income, filing jointly can reduce your combined tax liability. For example, couples with disparate incomes often see savings from joint filing.
Key Takeaways for Getting Married and Tax Implications
- Assess how marriage will affect your taxes, including eligibility for deductions and credits.
- Consider filing separately to avoid joint liability, though it may increase your tax bill.
If you want to discuss the tax implications of staying single, marrying, divorcing, or filing separately, please call 440-777-2207.
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Small Business Tax Services
As an expert in small business tax services and tax consulting Ken-Mar Tax eats, sleeps and breathes small business tax strategies. Being an enrolled agent allows founder, Ken Weinberg, to represent you to the IRS - something only a CPA, tax attorney and Enrolled Agent can do. EAs are the only federally licensed tax practitioners who specialize in taxation and also have unlimited rights to represent taxpayers before the IRS. It also means he is continuously being updated on the new IRS tax codes and taking classes from the IRS that provide guidance on how to file returns so that they are not "flagged."
When you get your taxes prepared by Ken Mar Tax you also have the option to purchase the Tax Audit Protection Plan to avoid the extra costs of paying for audit representation. If you are audited by the IRS, State of Ohio or local taxing authorities, Ken-Mar Tax will meet with the taxing authorities on your behalf to negotiate a settlement for you. The fee covers all costs up to the Appeals level, including up to 15 hours of correspondence with the auditing party – either the IRS, State of Ohio or locality.
