March 29, 2024

Penalty

Tying the knot sometimes means paying a marriage tax penalty

antongvozdikov / 500px | 500Px Plus | Getty Images

Some newlyweds get an unwelcome gift from the IRS: a bigger tax bill. 

While many couples end up paying less in taxes after tying the knot, some face a “marriage penalty” — that is, they end up paying more in taxes than if they had remained unmarried and filed as single taxpayers.

The penalty occurs when tax-bracket thresholds, deductions and credits are not double the amount allowed for single filers — and it can impact both high and low earners, as well as younger or older taxpayers.

More from Personal Finance:

Beyond IRAs: The Widow’s Penalty

While this book is focused on what to do when you inherit an IRA from a spouse, we would be remiss if we ignored the Widow’s Penalty.

From a strategic point of view, you will want to understand this IRS concept as it can have a material impact on your finances going forward. Because of its importance, we have gone into somewhat greater depth on this subject.

William Harris

Bill Harris, RMA

Bear with me; it’s crucial.

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