Marriage brings many changes to your life, including your tax situation. Many couples wonder whether tying the knot will lead to significant tax savings or if they'll face a "marriage penalty" instead. In reality, it depends on various factors, including your income levels, deductions, and personal circumstances.
In this comprehensive guide, we'll explore how marriage affects your tax preparation, the different filing status options available, and the potential tax benefits you might enjoy as a married couple. Should you have questions, our team at Lewis CPA is available to help.
How Marriage Affects Your Tax Situation
When you get married, your tax situation changes in several important ways. Your marital status as of December 31 determines your tax filing options for that entire tax year. This means that even if you got married on the last day of the year, the IRS considers you married for the whole year for tax purposes.
Tax Benefits of Marriage
While the impact of marriage on taxes varies, married couples can take advantage of several potential tax benefits.
1. Higher Standard Deduction
For married couples filing jointly for tax year 2025, the standard deduction rises to $30,000, an increase of $800 from tax year 2024. This is double the standard deduction for single filers ($15,000 in 2025), which means married couples generally don't lose out by combining their incomes.
If both spouses have taxable income, this combined standard deduction can significantly reduce your overall taxable income.
2. More Favorable Tax Brackets
The federal tax system uses seven tax brackets to calculate your tax bill based on income and filing status. For most income levels, the thresholds for married couples filing jointly are double those for single filers, which helps prevent a "marriage penalty".
For example, in 2025, the top marginal income tax rate of 37 percent will hit taxpayers with taxable income above $626,350 for single filers and above $751,600 for married couples filing jointly. This wider bracket at the highest tax rate can benefit couples where one spouse earns significantly more than the other.
3. Access to Tax Credits and Deductions
Those who file jointly typically receive more tax benefits than those who are married and file separately. These include:
- Child and Dependent Care Credit
- Earned Income Tax Credit
- Education credits (American Opportunity Tax Credit and Lifetime Learning Credit)
- Student loan interest deduction
Many of these credits have higher income limits for joint filers, allowing more couples to qualify.
4. Estate Tax Benefits
Marriage offers significant benefits when it comes to estate taxes. The estate tax exemption can be more valuable for married couples. For 2025, the exemption is $13.99 million for people who pass away in 2025.
One of the most significant advantages is the estate tax marital deduction, which allows unlimited transfers between spouses free of estate tax. Additionally, any unused portion of a deceased spouse's exemption can be transferred to the surviving spouse, potentially doubling their exemption amount.
5. Gift Tax Advantages
Gifts between U.S. spouses generally aren't taxable thanks to the gift tax marital deduction. This allows unlimited transfers between spouses without triggering gift tax consequences.
Additionally, you and your spouse can give gifts up to the annual gift tax exclusion amount ($19,000 for 2025) to the same person without reporting the gift to the IRS. This effectively doubles your annual gift-giving capacity.
Married Filing Jointly vs. Married Filing Separately: Which Is Better?
As a married couple, you have two main options for your filing status:
- Married filing jointly: You submit one tax return that combines both spouses' income, deductions, and credits.
- Married filing separately: Each spouse files their return, reporting only their income, deductions, and credits.
While married filing jointly typically offers more benefits, it may not be the best fit for everyone. Let's compare both options to help you make an informed decision about your tax filing options.
Advantages of Married Filing Jointly
Double the Deductions: Married and filing jointly typically can net you a bigger Standard Deduction, reducing your taxable income — $29,200 for most couples under age 65 in 2024, increasing to $30,000 in 2025.
Other benefits include:
- Access to valuable tax credits and deductions that aren't available to separate filers
- Higher income thresholds for certain tax breaks
- Typically results in a lower overall tax bill
- Simplicity of filing just one tax return
When Married Filing Separately Might Make Sense
When both spouses work and earn about the same amount, filing a joint return might put a couple into a higher tax bracket, while filing separately can result in a lower tax rate.
Here are some other situations where separate filing might be beneficial:
- If one spouse's out-of-pocket medical expenses exceed 7.5 percent of their individual adjusted gross income (AGI), but don't exceed 7.5 percent of their joint AGI
- To protect one spouse from potential tax liability issues
- When one spouse has significant debt subject to collection
- During separation or divorce processes
While the tax code generally favors joint returns, some spouses may benefit from filing apart, so it's worth calculating your taxes both ways to determine which method results in the lowest tax liability.
2025 Tax Brackets: What Married Couples Need to Know
Married couples should understand tax brackets to maximize their tax savings. Here’s what to know about the 2025 federal income tax brackets:
For married filing separately, the income brackets are generally half of the joint filing amounts, except for the highest bracket.
One important note — the U.S. tax system is progressive, meaning different portions of your income are taxed at different rates. You don't pay the same tax rate on every dollar of income.
Special Considerations for Married Couples
While marriage can offer tax advantages, there are also special considerations to keep in mind to avoid potential pitfalls. If you still have concerns about your taxes, Lewis.cpa can offer guidance tailored to your situation.
Income Disparities
When one spouse earns significantly more than the other, filing jointly often results in a lower overall tax bill. This is because the lower-earning spouse's income may "pull down" the tax rate applied to some of the higher-earning spouse's income.
Tax Changes After Marriage
After getting married, report any name changes to the Social Security Administration, as the name on your tax return must match what's on file at the SSA.
You'll also need to adjust your tax withholding by submitting a new Form W-4 to your employer to ensure you're withholding the appropriate amount based on your new joint income.
Spousal IRA Contributions
If a couple is married and one spouse isn't working, the non-working spouse can contribute to an IRA using joint income. This creates an additional opportunity for tax-advantaged retirement savings.
The Marriage Penalty
While the Tax Cuts and Jobs Act (TCJA) reduced many "marriage penalties" that previously existed, they haven't been eliminated. Higher-income couples may still face some marriage penalty effects, particularly if both spouses earn similar high incomes.
Make the Most of Marriage Tax Benefits with Lewis.cpa
While every couple's situation is unique, marriage typically offers more tax advantages than disadvantages for most people. Which is best for your specific circumstance? The key is understanding how the various benefits work and which filing status is ideal for you. Thankfully, you don’t need to go through this process alone.
For personalized guidance on navigating the tax implications of marriage, contact Lewis.cpa to schedule a consultation with our experienced tax professionals.
