Marriage And Taxes

Marriage and Taxes
Getting married is​ the​ greatest day for 50 percent of​ couples .​
The other 50 percent get divorced .​
Perhaps the​ marriage tax penalty has something to​ do with it .​
Family Values – Hardly
For all the​ chatter from politicians about family values,​ it​ is​ ironic that the​ tax code actually penalizes people for getting married .​
At its heart,​ the​ tax code is​ designed to​ modify behavior .​
Deductions and credits are given in​ areas the​ politicians wish to​ promote and taken away in​ areas considered less positive .​
Home ownership is​ viewed as​ a​ good thing,​ so mortgage interest is​ deductible .​
Cigarettes are bad,​ so they are taxed like no tomorrow .​
If you​ buy this argument,​ one must wonder why married couples suffer under the​ tax code .​
A recent study found that by getting married,​ couples are forced to​ pay roughly $1,​500 in​ additional taxes .​
Known as​ the​ marriage penalty,​ one must wonder what the​ government is​ up to​ .​
is​ it​ trying to​ promote family values or​ not? the​ numbers would seem to​ indicate not .​
The marriage penalty is​ a​ nasty little development for newlyweds .​
The penalty occurs because married couples must pool their earnings when they report taxes .​
Typically,​ this means their pooled earnings move them into a​ higher tax bracket and they pay more taxes .​
For instance,​ assume husband makes $45,​000 a​ year as​ does wife .​
As a​ married couple,​ their pooled income is​ $90,​000 with the​ accompanying tax consequences .​
For really doomed couples,​ the​ combined income will actually kick in​ the​ alternative minimum tax .​
The AMT more or​ less voids many major deductions .​
In the​ tax industry,​ there is​ a​ nickname for this situation – the​ divorce tax .​
The marriage penalty has existed for years,​ yet the​ politicians have failed to​ find a​ fix .​
They pay lip service to​ the​ idea,​ but no major changes have been made to​ fix the​ problem .​
The best they have come up with is​ doubling the​ standard deduction for married couples,​ but this has had little impact since most couples itemize their deductions .​
It appears the​ marriage tax penalty is​ here to​ stay for the​ foreseeable future .​
One has to​ wonder why our family values President didn’t include a​ fix in​ his tax cuts.