Most people assume that the partnership gained through marriage should allow a couple to put their funds together and lead a better lifestyle. However, the tax system has had, and continues to have, some issues that make this line of thought incorrect.

Working Spouses

Two working spouses does not equate to twice the income. While it is true that some families require both spouses to work in order make ends meet, there are situations in which one spouse makes considerably more than the other. In these cases, the small, secondary income can be just enough to move the family into a higher tax bracket. By barely limping into the next highest bracket, they are actually losing profits. Couple this with added childcare that must be paid due to the fact that no parent is home to take care of children. Add in business expenses that go along with a person’s everyday job and it is easy to see why some spouses may think they are earning a supplemental income while in reality they are working for very little, if anything.

Marriage Tax

Another tax issue that goes against marriage is the marriage tax. This tax penalty is a built in part of the tax tables which penalizes married couples whether they choose to file separately or together. This built in penalty stems from the fact that the standard deduction that the married couple could make is less that the sum of the deductions that the two spouses could make had they not been married. The tax tables pick on the married couples who fall into the fifteen percent tax bracket, by making the income limit less for married couples than it is for two single individuals. The average marriage tax penalty amounts to approximately $1,400 per year.

Marriage Tax Effects

The marriage tax not only affects a couple financially, but can create repercussions through the entire system. Because of the marriage tax, some couples delay marriage until after January in order to avoid the tax for one more year. The marriage tax is also the cause of divorce courts being overflowed with couples who are looking to avoid the marriage tax in December. The good news for married couples is that the marriage tax has been eliminated by the Jobs and Growth Tax Relief Reconciliation Act of 2003. However, this marriage tax relief expires in 2005 unless Congress approves its renewal.