• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Millennial Boss

Follow Julie on Social:

  • Facebook
  • Instagram
  • Pinterest
  • Twitter
  • About
  • Binge
  • Courses
  • Save Money
    • How to Save $26,000 in 7 Months
    • Paying Off Student Loans
    • DIY Wedding Flowers
  • Start a Business
    • Sell on Etsy
    • 101+ Easy Ways to Make Money Working From Home
    • Start A Lash Business
    • Start A Candle Business
    • Start a Lip Gloss Business
    • Start a Lifestyle Blog
  • Sell on Etsy
    • Etsy Shop Ideas for 2022
    • How I Made my first $1000 on Etsy
    • Create Printables to Sell Online
    • eRank Review
    • Sell Wall Art
    • Etsy SEO Tips
  • Printables
    • Free Heart Templates
    • Hot Chocolate Bomb Tags
    • Selling Etsy Printables
    • Gingerbread Man Templates
    • Butterfly coloring pages
    • Unicorn coloring pages
    • Best Digital Planners on Etsy
  • Contact

Thinking About Getting Married For Tax Benefits

Last updated on December 12, 2019 By Millennial Boss Leave a Comment

This post may contain affiliate links which means I may receive a commission if you purchase through my links. Please read my disclosure for more info.

  • Facebook
  • Twitter

Manifesting any big money goals? I earned $10,000 for the last 2 years selling easy-to-make printable products in an Etsy shop. I hope to double my earnings in 2023. Here is a free ebook teaching you how to get started with this side hustle too.

Wishing you had more money in the bank? Follow my instagram @millennialboss where I share my best money saving tips and ideas to make extra cash.

This post is from 2015.

So, do you want to get married tomorrow?

I asked my fiancé this question on Monday.  We’ve been engaged for three and a half months now and are planning our wedding for next year.

Given that today is New Years Eve and I’m a personal finance nut, I have been of course thinking about taxes this week. (I made my Goodwill donation this morning with all the other psychos. Hellooo tax deduction!)

If marriage would give us a tax benefit, I’d consider getting married before year-end.

Turns out the fiancé was OK with it too.  We decided that we’d do it if we could get a marriage bonus of $1000 or more.

So I looked into it.

Married Filing Separately or Head of Household

It doesn’t make sense to go the married filing separately route unless you have significant medical expenses (more than 10% of your Adjusted Gross Income) or another reason to file separately.  For example, you aren’t eligible for the student loan interest deduction or other valuable credits and deductions if you file married filing separately.  It did not make sense for us.

Head of household does not apply to us either although it’s a super valuable filing status for those who qualify.  To qualify for Head of Household status you need to be providing over 50% of living costs for yourself and a qualifying dependent and that dependent needs to have made less than $4k that year.

How Does Marriage Affect Taxes?

Traditionally, couples with equal incomes get penalized by filing together.  We are in two different tax brackets so we thought that it would benefit us to file together.

New York Times has an interactive version of the image below which shows whether you would receive a marriage tax bonus or penalty.

marriage tax bonus

The horizontal access shows the total income for both partners and the vertical access shows the split of that income between partners.

The max bonus seems to apply when couples have an unequal split and incomes of around $100,000.  The greatest penalty applies to couples who are around an equal split and really low incomes or really high incomes.

We fall somewhere in the lighter blue area so I investigated further.

Qualifying for Credits and Deductions When Married

Together we may have a low enough Modified Adjusted Gross Income to qualify for the student loan interest deduction, the Lifetime Opportunity credit, and deductions for traditional IRA contributions.  We didn’t both qualify for those credits and deductions separately.

In order to determine if this was true, I did a little research.  Merrill Lynch has a nice contribution guide that shows the 2015 contribution limits for tax advantaged accounts and income limits for credits and deductions.  The below images are from the guide.

2015 contribution limits

qualifying for credits

Most of the income limits for married filers are double that of single filers – which is good for most people, except it doesn’t help us. We would not qualify for the valuable Lifetime Learning Credit or have the ability to deduct traditional IRA contributions when filing together.  When we filed separately, one of us could claim those credits and deductions.

Additional bummer, you can only deduct $2500 for student loan interest when married filing jointly even though that is the amount that single filers can deduct. I was excited because I thought we could deduct up to $5000 in student loan interest together.

Marriage Bonus if Itemizing

Last item to investigate, how does itemizing affect taxes when married filing jointly?

When filing taxes, you can choose to itemize or take the standard deduction.  You would choose to itemize when you have more expenses to deduct than the standard deduction.  The single filer standard deduction is $6300 and the married standard deduction is $12,600.

We paid $17k in mortgage interest last year so we should itemize whether we file married filing jointly or separately.

Additionally, if one of us itemizes and the other takes the standard deduction, we would be looking at around a $23k deduction ($17,100 plus $6,300) versus a $17k deduction with just that one move.

If our mortgage interest was less than $6,300 it might make sense to file married filing jointly and take the standard deduction of $12,600 (when considering no other factors mentioned above).

Worth Getting Married for Tax Purposes?

Since we don’t get the tax credits and the extra student loan interest deduction that I had hoped for when filing married filing jointly AND the fact that we have such high mortgage interest, it didn’t make sense for us to file together.

I double checked using the H&R Block Tax Calculator and confirmed that we would actually see a marriage penalty of about $900 when filing together.

Conclusion – no eloping for us!  Our parents will be thrilled 🙂

 

Readers, do you receive a marriage bonus or penalty? Would you ever get married or delay getting married for tax purposes?

  • About
  • Latest Posts
Follow J
Millennial Boss
Julie paid off nearly $100k of debt and is on her way to financial independence. She is the creator of the Make Money with Printables side hustle course where she teaches people how to sell printables on Etsy and blog as a side hustle.
Follow J
Latest posts by Millennial Boss (see all)
  • How to Make a Backyard Movie Theater with a projector screen - September 19, 2020
  • HONEST Passive Income Planner Girl by Michelle Rohr course review - May 25, 2020
  • 35 Pink Aesthetic Wallpapers with Quotes and Collages - May 20, 2020
  • Facebook
  • Twitter

Filed Under: Money, Wedding

About Millennial Boss

Julie paid off nearly $100k of debt and is on her way to financial independence. She is the creator of the Make Money with Printables side hustle course where she teaches people how to sell printables on Etsy and blog as a side hustle.

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Primary Sidebar

About Millennial Boss

Julie paid off nearly $100k of debt and is on her way to financial independence. She is the creator of the Make Money with Printables side hustle course where she teaches people how to sell printables on Etsy and blog as a side hustle. Learn more..

Footer

Please note that Millennial Boss has financial relationships with certain merchants mentioned. Affiliate links may be used and commission earned in this post. While all attempts are made to present correct information, it may not be appropriate for your specific circumstances and information may become outdated. Copyright © 2021. All Rights Reserved.

About Millennial Boss

Millennial Boss is a lifestyle and personal finance blog created by Julie, who paid off six figures of student loan debt and is now on the path to financial independence and early retirement through side hustles. She lives in Seattle and teaches others how to start blogging and sell printables on Etsy.
Learn more here.

About Millennial Boss
How to Pay Off Debt
Save More Money Faster
Start a Blog that Makes Money
Sell Printables on Etsy
Disclaimer & Privacy Policy

Looking for something?

  • Selling Printables on Etsy
  • Disclaimer and Privacy Policy
  • Media
  • Contact

Copyright © 2023 · Wellness Pro On Genesis Framework · WordPress · Log in