how does “getting married for tax purposes” work
In: Economics
You can look at marriage two different ways. There’s the spiritual/cultural aspect and then there’s the legal side. The legal side is managed by the government, and they get to say what benefits are available to married people vs people that choose to be in a partnership not otherwise recognized.
If you’re not religious, there’s really not much difference between being a long term partnership vs being married. Except when it comes to those legal benefits, one of which is tax filing. Because the state recognizes you as a unit, your income (or lack there of) is now recognized as one.
So for example if Alex and Jordan are long term partners, they file taxes separately. Alex makes 200k a year and Jordan has recently begun working part time only while taking care of the kids, so takes home $12k…Both of them only get to take the standard deduction of $13850… meaning Alex gets taxed at a higher rate of 32% and Jordan is at 0. They pay 64k in tax.
If they’re married, they file together with their 212k and get taxed at 24%or 51k, saving them 13k , just by being married. And if Jordan were to stop working, they still get to take a standard deduction for both, whereas if they weren’t married, Jordan just wouldn’t file that year. So it’s lost income and lost tax savings.
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