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If you’re happily saying “I’m right” this year, keep in mind that the IRS may be a real buzz.
While many couples end up paying less taxes after marriage, some face the “marriage penalty” – meaning that they end up paying more than if they remained unmarried and registered as single taxpayers.
Penalties can occur if thresholds, deductions and credits are not twice the allowable for individuals – and this can hurt both high- and low-income families.
“It used to be more common  The Tax and Job Reduction Act, said Gareth Watson, a senior tax fund analyst.
З A record 2.5 million weddings are expected this yearyoung people – especially those who earn similar amounts – may want to carefully study how their marital status will affect their tax situation.
For marriages that occur at any time this year, the spouses must file tax returns for 2022 (to be filed in April 2023) as a married couple, jointly or severally. (However, filing individual declarations only in certain situations is it financially advantageous for the spouse.)
Here’s what you need to know:
A larger tax bill can come from several different sources for higher salaries.
In 2022, the highest federal rate of 37% is $ 539,901 in taxable income for individuals. However, for couples applying for a joint application, this rate applies to income of $ 647,851 and above.
“Everything [income] the brackets are doubled, except for the top bracket, ”Watson said.
To illustrate, two individuals, each with an income of $ 500,000, would fall into the tax group with the second highest rate (35%) if they filed as sole taxpayers.
However, as a married couple with a total income of $ 1 million, they will pay 37% of the $ 352,149 (the difference between their income and the threshold of $ 647,851 for a higher rate).
Other parts of the tax code can also negatively affect those who earn more when they get married.
For example, the regular Medicare payroll tax – 3.8%, which is divided between employer and employee – applies to salaries of up to $ 200,000 for single tax payers. Anything above this is subject to an additional Medicare tax of 0.9%.
For married couples, this additional tax is $ 250,000.
Similarly, there is an investment income tax of 3.8%, which applies to individuals with a modified adjusted gross income above $ 200,000. Married couples must pay a fee if their income exceeds $ 250,000. (The tax applies to things like interest, dividends, capital gains, and rental or royalty income.)
In addition, the limit for deducting state and local taxes – also known as SALT – does not double for married couples. The $ 10,000 limit applies to both single and married people. (Married couples who apply separately receive $ 5,000 each for the deduction). However, the write-off is only available to taxpayers who detail.
For low-income couples, the marriage penalty may arise from the income tax credit.
The loan is provided to working taxpayers with children if they meet the income limit and other requirements. Some people with low wages and no children are also eligible for this.
However, for married couples, the income limits that come with tax breaks do not double. (Also keep in mind that the extended version of the loan, which was valid for 2021, was not extended for 2022.)
For example, one taxpayer with three or more children can claim a maximum of $ 6,935 with an income of up to $ 53,057 in 2022. For married couples, this limit is not much higher: $ 59,187.
Depending on where you live, there may be a marriage penalty built into your state’s border tax groups. For example, Maryland’s highest rate of 5.75% applies to income above $ 250,000 for single people but above $ 300,000 for married couples.
According to the Tax Fund, some states allow married couples to file a separate tax return to avoid penalties and loss of loans or benefits.
Meanwhile, if you are already receiving Social Security retirement benefits, marriage can have tax implications.
For individuals, if the total amount of your adjusted gross income, non-taxable interest and half of your Social Security benefits is less than $ 25,000, you will not pay taxes on those benefits. However, for couples filing a joint declaration, the threshold is $ 32,000, not double the amount for individuals.
Also, if you or your new spouse contribute to traditional or individual Roth retirement accounts, pay attention to how much you invest in these IRAs. There are restrictions that apply to deductions and contributions, and the income from both spouses supports the equation.