Getting married affects many aspects of life, including income and income taxes. Married couples in the United States have the option of filing joint tax returns or separate tax returns. The filing status couples choose can impact overall tax liability; couples who file joint returns are afforded different tax deductions than other taxpayers which may reduce tax liability for some couples.
Standard Deduction for Joint Filers
When you file an income tax return with the Internal Revenue Service (IRS), you must choose to use a standard tax deduction or to itemize deductions. Tax deductions reduce the total pool of income that is subject to tax. For example, if you made $40,000 last year and you had $5,000 in tax deductions, only $35,000 would be subject to income taxes. According to the IRS, married couples filing joint returns have a standard deduction of $11,900 for 2012 returns. Joint filers will be better off taking the standard deduction unless itemized deductions exceed that amount.
Standard Deduction for Separate Filers
Married people sometimes choose to file separate tax returns. The IRS states that the standard deduction for married couples filing separate returns is $5,950 for 2012 returns, which is the same as the deduction for single filers and half that of joint filers. If both partners earn a similar amount of income, there may be little difference between filing joint and separate returns in terms of total taxes owed.
Other Tax Deductions
Aside from the standard deduction, marriage can impact a variety of other tax deductions and credits. The IRS often offers higher limits on certain tax incentives to married couples filing joint returns than to single filers. For example, TurboTax states that there is a $250,000 tax exclusion (essentially a deduction) for profits gained from selling a home, but married couples filing joint returns are granted a $500,000 exclusion.
Married couples face different tax brackets in addition to different tax deductions. This means married couples can potentially pay more or less in taxes as a result of marriage. When married couples end up paying more after getting married, it is known as the "marriage penalty." According to TurboTax, filing separate tax returns when married rarely works to a couple's advantage and if one partner chooses to itemize deductions, the other partner cannot take the standard deduction on a separate return.