how does “getting married for tax purposes” work
In: Economics
|Tax Rate|Single|Married filing jointly|
|:-|:-|:-|
|10%|$11,600 or less|$23,200 or less|
|12%|$11,601 to $47,150|$23,201 to $94,300|
|22%|$47,151 to $100,525|$94,301 to $201,050|
|24%|$100,526 to $191,950|$201,051 to $383,900|
|32%|$191,951 to $243,725|$383,901 to $487,450|
|35%|$243,726 to $609,350|$487,451 to $731,200|
|37%|Over $609,350|Over $731,200|
It generally only works when there’s a significant difference in income levels.
Imagine a person making $300k and another making $50k. The higher earner would be in the 35% bracket while the lower would only be in the 22% bracket. By getting married, the full income never gets above the 24% Bracket. Yes, the $50k person is now in a higher bracket, but as a combined financial entity, their overall tax bill is lower.
It’s important to note that there’s a marriage penalty when both individuals are high income. Two people each making $400k would have been in the 35% bracket, but would go to 37% when combined.
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