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Question:


What are the tax benefits of marriage?
-LivingSingle


Answer:


It depends largely on whether both halves of the couple are working. If not, then the tax benefits can be substantial. There’s the extra allowance, good for $3,650 on returns filed this year, and deductions that otherwise would have gone unclaimed for the nonworking spouse because he or she would have had no income to deduct them from. A married couple in which only one person works and who take the standard deduction can cut their income in the eyes of the Internal Revenue Service by $9,350, including $5,700 from the extra standard deduction and the extra $3,650 allowance. For a couple in the 25 percent tax bracket, that’s $2,337.50 less tax to pay.
 
Another advantage for a married couple with one wage earner is the ability for both to pay into an individual retirement account and take a tax deduction on the contributions, assuming the working spouse meets the various criteria that anyone else must meet. So even with only one person earning employment income, the couple can make a $10,000 tax-deductible contribution or $12,000 if the working spouse is over 50 years old.
 
Now the bad news: Marriage can increase the tax liability of power couples who both work and earn decent money and file a joint return. They get the same deductions and allowances that they would have as individuals, but combining their income can push them into a higher tax bracket. Maybe you can’t put a price on love, but if you make a good living, there’s a price to pay for getting married.
-Conrad de Aenlle



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