Download Special Report No. 77
Special Report No. 77
Executive Summary
Many elements of the tax code vary with marital status, including the amount of the standard deduction, the earned income tax credit, and the taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities.
rate schedule. All of these differences can cause a married couple to have different tax liability that two similarly situated single people.
A married couple filing jointly incurs a “marriage penaltyA marriage penalty is when a household’s overall tax bill increases due to a couple marrying and filing taxes jointly. A marriage penalty typically occurs when two individuals with similar incomes marry; this is true for both high- and low-income couples. ” if their tax bill is higher than the combined tax bills that they would have paid if each could have filed singly. Similarly, a married couple receives a “marriage bonus” when the sum of the individual tax liabilities had they filed singly is greater than their tax liability under a joint return.
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