Tax Benefits to Getting Married

Marriage provides tax benefits for many taxpayers.

Despite the publicity surrounding the marriage penalty with income taxes, marriage still provides tax benefits for many taxpayers. Pooling two incomes into one household and combining deductions and allowable exemptions may mean a lower tax bill for couples. In addition, marriage allows greater tax deferrals and exemptions in certain tax situations than what is available to a single tax filer.

Standard Deduction

Married people are entitled to a higher standard deduction than single people. In 2012, the standard deduction amount for married people filing jointly was $11,900, exactly twice the amount for a single person. If your deductible expenses do not increase significantly when you combine households in marriage, you may benefit from taking the higher standard deduction and save on taxes.

Income Differential

Marriage provides a particular benefit when one spouse has considerably more income than the other. The income thresholds for higher tax brackets increase significantly when a couple files a joint return. This could result in a larger portion of the higher-earning spouse's income being taxed in a lower bracket.

Home Sale

Taxpayers are allowed to exempt a portion of the profits from the sale of a primary home from taxes. A couple can exempt up to $500,000 in profit from this sale, whereas a single person can only exempt $250,000. You must have lived in the home for two of the five years before selling it to claim this exemption.

Estate Taxes

A married person may leave all of his estate to his spouse and the spouse will not have to pay estate taxes at that time. Any amount over the federally allowed exemption will be taxed when the spouse leaves the estate to her heirs, but the surviving spouse should have more time to plan and minimize the tax impact upon her death.

IRA Retirement Plans

Married people are allowed to earn higher adjusted gross incomes and still qualify for a Roth IRA provided they file joint returns. As of publication, a single person's allowable Roth contribution begins to phase out when he earns $110,000 per year in adjusted gross income. The amount increases for married people filing a joint return to $173,000 as of 2012. Contributing to a Roth can significantly reduce taxes at retirement, because Roth withdrawals are tax-free.

References

• Kiplinger: Marriage and Taxes
• Bankrate.com: How Marriage Impacts your Taxes
• Kiplinger: How Getting Married Affects Your Taxes
• Internal Revenue Service: In 2011, Many Tax Benefits Increase Slightly Due to Inflation Adjustments
• Internal Revenue Service: 2011 Contribution and Deduction Limits - Amount of Roth IRA Contributions That You Can Make For 2011