Talk:Marriage penalty

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Does "marriage penalty" mean the couple must pay higher taxes than two unrelated people with the same income, etc.? Or simply that it can cost more to file together? --Uncle Ed 18:05, 26 January 2007 (UTC)
 * They must pay higher taxes, in certain cases. In other cases they can pay less (or the same if they decide to be nice to the USA and file separately!). Eric Kvaalen (talk) 09:48, 29 March 2017 (UTC)

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Trouble with second paragraph, I'm not sure the proper correction. It currently says "The source of this increase in taxes has its roots in the progressive tax-rate structure in income-tax laws, that is, a higher income pays a higher rate of tax. In such a context income averaging is advantageous to the taxpayer. E.g. two persons, one making $80,000 and the other making $20,000 in a particular year, will pay a larger combined tax than they would if both had an income of $50,000 in the same year." If it is advantageous to average, wouldn't that mean they would pay a smaller combined tax? It seems so, but when I went to fix it I got confused. Sigh. GRBerry 23:01, 23 February 2007 (UTC)
 * That's correct — the progressive tax-rate structure means that married couples often pay less tax than they would if not married. I have recently edited the article to make that more clear. Eric Kvaalen (talk) 09:48, 29 March 2017 (UTC)

Need to add 'head of household' into the discussion
I didn't see anything in the article that addressed how filing as head of household affects taxation. —Preceding unsigned comment added by Michael.Urban (talk • contribs) 17:51, 30 January 2008 (UTC)

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The article needs to include information on the huge marriage penalty incurred when one or more spouses is collecting Social Security. For singles Social Security starts becoming taxable when half of the Social Security received and all other income exceeds $25,000. For married couples this amount is $32,000. This creates an $18,000 penalty for some married couples as compared to two single people with the same income.

Most people do not realize that when these income levels are exceeded that every additional dollar of income after that creates a $1.85 of taxable income. The taxabality of Social Security was implemented in 1992 by the Clinton administration with VP Al Gore casting the tie breaking vote in the Senate.

In addition the $25,000 and $32,000 thresholds are not indexed for inflation and remain fixed at the same amounts set in 1992. —Preceding unsigned comment added by 69.130.69.90 (talk) 14:55, 17 February 2008 (UTC)

Dependent care penalty
Another aspect of the marriage penalty relates to dependent care FSAs.

Consider a couple with two children, both in daycare.

If the parents are not married, they can put up to $5,000 each (total of $10,000) of daycare expenses into a pre-tax FSA.

If the parents are married, the figure is $5,000 total.

Grover cleveland (talk) 21:00, 15 April 2011 (UTC)

Biased Language
The "marriage penalty" term is a false, biased, right-wing propaganda term. The article's failure to point that out clearly at the top needs to be corrected.

There are significant tax "marriage benefits", as noted in the article "The Myth of the Marriage Penalty." Specifically: "51% of married couples paid less tax jointly than if they had not been married, according to a 1996 Congressional Budget Office analysis."

As the term "marriage penalty" is verifiably FALSE the article fails to meet Wikipedia's standards and needs to be changed.

http://money.msn.com/family-money/the-myth-of-the-marriage-penalty-weston.aspx — Preceding unsigned comment added by 50.39.151.207 (talk) 15:45, 26 September 2011 (UTC)

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The below is false because there is a penalty for being married, if you are in the 25% tax bracket or higher. Please do not try to make this political. — Preceding unsigned comment added by 24.151.12.89 (talk) 18:02, 5 November 2011 (UTC)
 * The preceding comment was not added in proper chronological order. It refers to the above section. --BDD (talk) 23:43, 29 August 2013 (UTC)

Calculator
I put together a calculator for this at http://marriagetaxcalculator.com/. If someone else thinks that it is useful, please add it to the external links -- I'm not going to post it since I wrote it. — Preceding unsigned comment added by Dhp88 (talk • contribs) 17:36, 15 April 2012 (UTC) Dude, your page doesn't work. In just returns {"error":0,"errorMsg":[]}.Bill C. Riemers (talk) 11:40, 21 April 2012 (UTC)

Marriage penalty for US citizens living abroad
It would probably be nice to add an example, but it seems a bit overly complicated. For example consider an US citizen married to a Canadian citizen both residing in Canada and both earning $150,000 USD per year. With 2011 tax rates, if not married the US citizen would owe $16,100 in US taxes minus of course any tax credits. The Canadian would of course would not owe US taxes. If married but filing separately, the US citizen would owe $18,292 in US taxes minus any credits. The Canadian spouse of course not would owe US taxes. If filing jointly together they would owe $61,079 minus any tax credits.

Now here is where it gets complicated. The above calculations assume the US citizen taxes the $92,500 foreign income exclusion. However, the income exclusion also exclude foreign tax credits at a non-progressive rate. e.g. You pay much less tax on the first $92,500 than the remaining amount. So often the US tax bill is less without the exclusion...  To furthur complicated things I completely ignored the effects of retirement savings plans, as I still don't really fully understand that myself. e.g. The US citizen cannot deduct the money they pay into the retirement plan from their US income, but they file an exemption for the earnings on the plan. The rules for the US spouse in regards to retirement savings plans and such are completely unclear. To further complicate things, sometimes the US citizen can be treated as head of household even though married. http://www.irs.gov/businesses/small/international/article/0,,id=96729,00.html

At first it might appear in the case of using the exemption it is a no-brainer, file separately, and the marriage penalty is only $2192. However, when married filing separately, you lose many possible credits and deductions that a single person could normally take, and your standard deduction is lowered. Also, generally you get a credit for foreign taxes paid. So in real life it works out in most cases where it is cheaper for the couple to file jointly. However, there is then a huge hidden cost. For example, by volunteerly filing jointly, the non-US spouse may have to declare all their foreign accounts on a form 8983. In addition to needing pay taxes on things that might normally be tax free in the country they reside, such as an educational grant, they could face penalties of 5% or $10,000 for every account they fail to file on a 8983. No tax software I know of informs tax payers living abroad of this form, and as far as I know it is never mentioned in the IRS instructions when filing their 1040. Penalties on the order of $100,000 or higher are not that uncommon. All because the couple decided to try and avoid the marriage penality and file jointly.Bill C. Riemers (talk) 11:40, 21 April 2012 (UTC)

Non US nationalities
Something doesn't seem correct about this section. Being a non-citizen or non-resident would imply persons that are illegal aliens. These people have no legal status, so how could there any applicable tax code? -- T HE F OUNDERS I NTENT  PRAISE 15:08, 8 April 2013 (UTC)
 * There are (literally) billions of persons who are neither a citizen nor a resident of the United States, nor an "illegal alien".  Some of them are married to US citizens. -- Austrian (talk) 07:24, 15 April 2013 (UTC)

Additionally, there are "legal aliens", which are citizens of a different country who are residents of the United States. Some are temporary (work visas, green cards, etc), some are married to US citizens who have chosen to keep their birth nationality, some are just retired here and living in someplace popular like Florida on long-term visas. As residents they are subject to the tax code even if they aren't citizens. — Preceding unsigned comment added by 173.74.56.200 (talk) 18:00, 26 April 2013 (UTC)

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[Added 4-26-2013]I am placing this on the talk page because it is FAR too complicated for me to edit on the wiki. There's a problem with the example presented that calculates the marriage tax penalty/benefit. In the final example of two people with one having $100,000 income and the second having zero, there are numerous factors left out that have a major effect. For marrieds filing jointly, the zero income partner has no access to unemployment, food stamps, welfare, and numerous other federal programs that are available to zero or low-income unmarrieds, which will more than offset the cited $368 benefit of married filing jointly. Additionally, if an unmarried couple itemizes deductions (fairly common in over $100,000 households), filing separately allows one individual to claim ALL household deductions while the other can claim the standard deductions...a benefit specifically denied to marrieds filing separately. The claim that there "is no marriage tax penalty" can only be politically motivated, because the penalty is not only real, but is larger than most people realize when details are added into the mix. — Preceding unsigned comment added by 173.74.56.200 (talk) 17:55, 26 April 2013 (UTC)

"Fiction of Earned Income Splitting"
Several Recent Edits by 50.152.41..187 appear to be WP:OR, WP:Syn and in many places unsourced. For Instance The first four paragraphs of Earned Income Splitting contain one source and that appears to be a blog of limited repute.

"These "marriage bonuses" are often either subsidized by single people and two-earner marriages or are unfunded and thus contribute to government borrowing" is attributed [|here] but that citation doesn't contain that information.

I appreciate that you've worked hard on this but it's not all sourced a lot of it is WP:OR or WP:Syn I'm happy to re-work on it with you section by section. — Preceding unsigned comment added by SPACKlick (talk • contribs) 15:22, 24 January 2014 (UTC)

Assessment comment
Substituted at 23:16, 29 April 2016 (UTC)

How did this come about?
Can someone tell us (and put it in the article) how and when the penalty (or penalties) came about? According to Income splitting, the system in which the tax is calculated as though each spouse earned half the total was implemented in 1948, but it sounds like at the time it was only beneficial to married couples. At what point were the higher-end thresholds for married couples lowered so that it actually became a disadvantage for couples, where the two persons earn similar high amounts, to get married? And why was this done? Eric Kvaalen (talk) 09:48, 29 March 2017 (UTC)

use as political fodder
The topic — much like death tax — is often used as a squawking point (by all political stripes). Similarly, I note that it has become a meme that causes an emotional response and shuts down rational discourse, often with deep misunderstanding as to whom it actually applies.

I find the lack of the terms origin to be a major gap here. Reference to published work of the "marriage tax" appearing in political campaigns certainly ought to be welcome Weeb Dingle (talk) 19:06, 21 January 2018 (UTC)