Check How Much Higher Your Taxes Will Be Before Tying the Knot
Happy Valentine’s Day! Getting engaged? Thinking about it? Well, watch out because you may have to pay higher taxes. America's marriage tax penalty is alive and well, which is to say that when a working wife and working husband marry they pay a higher rate than if they had stayed single.
According to the Tax Foundation, middle income couples get taxed more for being married. The penalty hits families progressively harder in the 28%, 33% and 35% brackets.
Are you earning more than $450,000 as a married couple?
You'll be hit by the President's new 39.6% levy. If you divorce, each partner could earn up to $400,000 at the lower rate before the higher one socks in.
The impacts are big at the other end of the income spectrum. Working couples often lose government benefits when they marry.
Then there's Obamacare. By 2014, the new health care law will mean married couples will generally receive $1,500-$10,000 less per year in health care premium support than couples who live together without being married.
According to Heritage, is the greatest on a 60-year-old couple earnings about $30,000 each. Their annual marriage penalty in lost premium reimbursement could be as high as $10,000. Even a lower income married couple of the same age earning $15,000 a year would receive an annual government bonus of $4,212 if they chose to divorce and live together.
The tax penalties hit the country just as the percentage of intact married families in this country have fallen to an all-time low. While nearly 80% of Americans were married in 1980, only 52% of adults are married today.
Has the marriage penalty caused that fall? Probably not, but it sure doesn't help.
To find out how much of a penalty you are paying, check out the Tax Policy's tax calculator at Taxpolicycenter.org.