How Getting Married Affects Your Taxes
Information for Tax Year 2024
Getting married is a big life decision. Many aspects of your life may change, and that includes your taxes! This blog post will discuss how tying the knot can affect your tax situation.
Filing Status
If you are legally married, you must file as Married Filing Joint (MFJ) or Married Filing Separately (MFS) on your tax return. Generally, filing as MFJ is more beneficial because you may be able to claim certain credits and deductions that aren’t available to taxpayers filing as MFS, such as:
Student loan interest deductions
Many factors can impact your taxes. If you're unsure which filing status is most beneficial for your situation, consider consulting a tax advisor. They can review your income and run scenarios to determine the best filing status for you.
Name and Address Change
If you change your name when you get married, you must notify the Social Security Administration (SSA) by filling out Form SS-5, Application for a Social Security Card. The IRS uses data from the SSA to verify your identity and not having accurate and up-to-date information may cause problems when you file your tax return.
Changes to your address should be reported to the United States Postal Service and your employers. You can change your address online or visit your local post office and request a Mover’s Guide packet.
Tax Withholding
After you get married, you should review your tax withholding and provide your employer with a new Form W-4, Employee's Withholding Certificate. This form includes information on your filing status and if your spouse also works. If you're unsure how to fill out this form, you can use the IRS Tax Withholding Estimator.
Tax Brackets
When filing as MFJ, you could be placed in a higher or lower tax bracket than if you filed as a single taxpayer. This leads to what people call the "marriage penalty" or "marriage bonus."
Marriage Penalty
The marriage penalty occurs when you owe more tax filing together than if you were both single. This used to be more common before the Tax Cuts and Jobs Act of 2017 when the tax threshold wasn't doubled for married filers as it was for single. Now, the tax bracket and rates are almost double for MFJ as they are for single.
The one exception is the 37% bracket where in 2024, single taxpayers are currently taxed on income over $609,350 and MFJ are taxed on income over $731,200.
Generally, you will only owe more if you and your spouse are equally high earners.
Marriage Bonus
The marriage bonus occurs when you owe less tax filing together than if you were both single. This typically happens when one spouse earns a lot more than the other. The spouse earning less may pull the higher earner into a lower tax bracket, lowering the overall tax you both owe.
Work Benefits
If you and your spouse receive benefits from work, you can typically pick the benefits that are most advantageous for the two of you. Depending on the benefits, you may be able to increase your tax savings.
Selling a Home
One big way being married can affect your taxes is if you sell a home. As an individual, if you own and use a home as your principal residence for at least two years during the past five years, then you can claim a $250,000 gain exclusion on the sale of your home. When you get married and both live in a home for two of the past five years, then you can claim the larger $500,000 gain exclusion.
Gift and Estate Taxes
Couples do not need to file a gift or estate tax return if their spouse is on the receiving end. Instead, the tax is postponed until the receiving spouse has passed.
Marriage Tax Counseling
Need help understanding the tax implications of getting married? Our tax professionals can help you determine the best filing status, identify the credits and deductions you qualify for, and save you money in the future. Call us at (360) 922-0235 to learn more!
Disclaimer: This material is prepared for informational purposes only, and is not tax advice. Please speak with a tax professional or visit the additional resources below to see how this information may apply to you.
