As an accountant, I’m sometimes asked how marriage will affect a client’s taxes.
The good news is that there are actually a few potential tax benefits to tying the knot. Today’s post will take a deep dive into how saying “I do” might help you save on taxes.
What are the tax-filing statuses for married couples?
Before we begin, you should know that married couples have two main tax-filing statuses to choose from: Married Filing Jointly or Married Filing Separately. For most couples, choosing to file as married filing jointly will result in the most tax benefits, but I’ll discuss some times where it might be smarter to file separately later in this post.
Are there tax advantages to being married?
Yes, there are some benefits to filing as married filing jointly:
Benefit #1: Ease of Filing and Possible Tax-Filing Cost Savings
One obvious advantage to filing jointly is that between the two of you, you’ll spend less time and effort filing one return instead of two separate returns. Additionally, if you hire a CPA or accountant to file your taxes for you, it will most likely cost less since you’ll only be paying for them to prepare one return rather than two.
Benefit #2: The Marriage Bonus
You may have heard of the “marriage penalty” – which I’ll discuss later in more detail – the idea that couples who both earn similar incomes could end up paying more in taxes once they’re married. While this can be true, so can the opposite.
The “marriage bonus” comes into play when one spouse earns significantly more than the other, which results in the married couple being in a lower tax bracket when they file jointly. This results in lowering the tax rate on some of your income, which in turn lowers your tax burden.
For instance, if you earn $105,000 as a single filer for tax year 2025 and your partner earns $40,000 as a single filer, you would be taxed at the 24% rate and your partner would be taxed at the 12% rate for your individual income. However, if together you earned $145,000 and filed as married filing jointly, then you’d be taxed at the 22% rate. Not taking into account any other credits or possible deductions, this change in tax rate could save you a couple of thousand dollars on your tax bill.
Benefit #3: Spousal IRA
Another financial advantage for married couples – especially in couples where one spouse doesn’t work or has little income – is the opportunity for the non-working spouse to contribute to an IRA. If married and filing jointly, both spouses can make IRA contributions into separate IRAs.
For tax year 2025, the IRS allows each spouse to contribute up to $7,000 (or $8,000 for those 50 and older) to their own IRA, so it’s a smart way to ensure that both spouses are building their nest eggs, even if one isn’t employed.
Benefit #4: Financial Benefits
Outside of taxes, there are often other financial benefits to marriage. For instance, being married can help streamline your health coverage since many employers allow spouses to be added to their employee’s health insurance plan for less than it would cost to pay for two separate plans.
Additionally, by combining assets and income, married couples can also find savings in the way of reduced auto and home insurance prices and can often get better rates or terms on loans or lines of credit. Overall, marriage can provide more flexibility when it comes to financial options, which can reduce your total household costs.
Are there tax disadvantages to being married?
It may bring you relief to hear that there’s really just one disadvantage to consider when thinking about how your taxes will be affected by marriage. However, make sure you also read about the advantages and disadvantages to filing as married filing separately – rather than jointly – in case any of those less-likely scenarios could apply to you.
Disadvantage #1: The Marriage Penalty
As I mentioned earlier, the “marriage penalty” may apply to couples who are both high earners or who both earn about the same amount because in this situation, the combined income of a married couple can push them into a higher tax bracket than they would have paid individually. Obviously, this would result in a higher tax bill.
If you think you may be in this situation, then it would be best to consult an accountant to help determine the impact your marriage or tax-filing status might have on your specific tax situation.
What are the advantages and disadvantages to filing as married filing separately?
There are limited situations where it might make sense to choose to file as married filing separately rather than married filing jointly. This is definitely something you’d want to discuss with an accountant to make sure the status change makes financial sense for you and your spouse.
Some common reasons that married couples may consider filing separately rather than jointly are:
- Like I previously discussed, if both spouses are high earners or earn about the same amount and filing jointly would place them in a higher tax bracket, then they may choose to file separately to reduce their tax burden.
- If one spouse wants to protect their potential tax refund in cases where their spouse may have a high tax bill, they may choose to file separately. This situation may happen when a spouse is behind on child support or owes a large amount of taxes or penalties from previous tax years.
- If a divorce is likely, couples may choose to file separately to start unraveling their finances and prevent issues during divorce proceedings.
- If one spouse has a large amount of medical expenses that wind up exceeding 7.5% of their individual adjusted gross income (AGI) but not exceeding 7.5% of the couple’s joint AGI, that spouse may be able to take the medical deduction and reduce their tax bill by filing separately if itemizing.
- If a married couple’s AGI is too high to claim a casualty deduction for property loss in a federal disaster area, filing separately so that one spouse can claim the deduction may lower the couple’s overall tax bill.
- If one spouse’s student loan repayments are calculated based on their income, then filing separately could lower their monthly repayment amount.
Additionally, one thing to keep in mind when filing as married filing separately is that if you want to claim the Earned Income Tax Credit, you typically can’t do that unless you file a joint return with your spouse. The exception to this would be if you lived with a qualifying child for more than half the year and either lived apart from your spouse for the last six months of the tax year or lived apart from your spouse at the end of the tax year and were legally separated under your state’s law with a written separation agreement or similar decree.
Abridged by Amy
While the standard deduction isn’t impacted by filing your taxes jointly, you and your spouse’s income amounts and special circumstances can present opportunities in the way of tax advantages. If you want to know how a marriage, divorce, filing status change, or any other major life change may affect your tax bill, don’t hesitate to reach out to an accountant to help crunch your numbers and work with you to save you as much tax money as possible.
