by
Brooke
Sutton/Getty
Images)
Last
week,
everyone
(except
perhaps
the
residents
of
North
Sentinel
Island)
learned
that
Travis
Kelce
had
taken
a
knee
to
propose
to
Taylor
Swift.
When
Swift
announced
their
engagement,
fans
celebrated
—
it
felt
like
the
classic
fairy-tale
moment
when
the
high
school
quarterback
marries
the
homecoming
queen.
For
many,
it
was
a
reminder
of
a
simpler,
more
wholesome
time
thought
to
have
been
lost
in
today’s
tribalistic
era.
Like
many
others,
I
wish
them
well,
hope
they
have
lots
of
children,
and
that
they
set
an
example
for
modern
marriages.
The
U.S.
Treasury
also
wishes
them
well
because
their
marriage
could
mean
a
yellow
flag
from
the
IRS,
thanks
to
the
marriage
penalty.
The
“marriage
penalty”
occurs
when
a
married
couple
pays
more
in
income
taxes
than
they
would
have
if
each
spouse
had
filed
as
single.
This
penalty
typically
affects
high-income
couples.
For
2025,
the
top
federal
tax
rate
remains
37%
for
individual
filers
with
incomes
over
$626,350.
But
for
married
couples
filing
jointly,
the
37%
threshold
isn’t
doubled
to
$1,252,700.
Instead,
it
kicks
in
at
$751,600.
The
same
applies
to
capital
gains.
The
top
long-term
capital
gains
tax
rate
of
20%
applies
once
a
single
taxpayer’s
income
exceeds
$518,901.
But
for
married
couples
filing
jointly,
the
20%
rate
applies
once
their
combined
income
exceeds
$583,751
—
not
$1,037,802,
which
would
be
the
doubled
threshold.
Another
way
the
marriage
penalty
can
appear
is
through
lost
deductions.
For
example,
the
student
loan
interest
deduction
begins
to
phase
out
once
income
exceeds
$85,000.
A
single
filer
earning
$65,000
qualifies.
But
if
that
person
marries
and
the
couple’s
joint
income
exceeds
$200,000,
the
deduction
disappears.
The
state
and
local
tax
(SALT)
deduction
works
similarly.
While
the
One
Big
Beautiful
Bill
Act
raised
the
deduction
cap
to
$40,000
from
$10,000,
it
did
not
double
the
cap
for
married
couples
filing
jointly.
If
each
spouse
filed
separately
as
single,
each
could
claim
the
full
$40,000.
That
said,
the
marriage
penalty
is
usually
not
that
high.
For
example,
suppose
a
couple
earns
$1.4
million,
with
each
spouse
earning
$700,000.
Filing
separately
as
singles,
each
would
owe
$216,020
in
federal
income
taxes
—
for
a
total
of
$432,040.
Filing
jointly,
however,
their
tax
bill
would
be
$442,062.
That’s
a
$10,022
difference
—
or
a
2.3%
increase.
Because
tax
law
is
complex,
especially
for
high
earners,
the
actual
penalty
could
be
higher
or
lower
than
in
this
simplified
example.
With
September
already
here,
couples
might
consider
consulting
a
tax
professional
to
estimate
whether
they’ll
face
a
marriage
penalty
by
year’s
end.
For
couples
considering
marriage,
one
option
to
avoid
the
penalty
is
to
register
as
domestic
partners
(RDPs)
in
states
that
allow
it.
The
IRS
requires
RDPs
to
file
as
single
or
head
of
household,
though
they
must
file
as
married
(either
jointly
or
separately)
at
the
state
level.
This
often
means
filing
two
federal
returns
as
single
while
also
filing
one
or
two
state
returns
—
hardly
a
simple
solution.
Others
may
choose
to
cohabitate
without
marrying
—
not
solely
for
tax
reasons.
The
most
famous
example
is
Kurt
Russell
and
Goldie
Hawn,
who
have
lived
together
since
1983
without
marrying.
While
the
IRS
generally
respects
filing
status,
it
has
occasionally
challenged
long-term
arrangements.
A
notable
case
was
Boyter
v.
Commissioner.
A
Maryland
couple
obtained
quick
foreign
divorces
in
Haiti
and
the
Dominican
Republic
at
the
end
of
tax
years
1975
and
1976,
solely
to
file
as
unmarried
individuals
and
reduce
their
tax
liability.
They
remarried
soon
after.
The
IRS
argued
the
divorces
were
invalid
under
Maryland
law
and,
alternatively,
that
they
were
shams
not
to
be
recognized
for
federal
tax
purposes.
Will
the
marriage
penalty
ever
be
eliminated?
Probably
not.
Most
people
marry
for
love,
not
tax
benefits,
and
only
a
relatively
small
group
of
taxpayers
is
affected.
The
marriage
penalty
doesn’t
just
apply
to
wealthy
power
couples.
With
careful
planning,
many
couples
can
either
avoid
it
or
at
least
soften
the
blow
—
and
the
money
saved
might
even
cover
an
anniversary
gift.
Steven
Chung
is
a
tax
attorney
in
Los
Angeles,
California.
He
helps
people
with
basic
tax
planning
and
resolve
tax
disputes.
He
is
also
sympathetic
to
people
with
large
student
loans.
He
can
be
reached
via
email
at
[email protected].
Or
you
can
connect
with
him
on
Twitter
(@stevenchung)
and
connect
with
him
on LinkedIn.