5 Clear Tax Benefits of Marriage Under US Tax Law


tax benefits of marriage Marriage are made in heaven , they say. Yea, but certain  tax benefits are available only in US under Internal Revenue Code. What are those tax reliefs and how can you you avail of is discussed below .

1. Married Couple Gets Separate Tax Slab of Rates

Since tax  rate slabs (refer tax bracket )are fixed for filing tax returns as married couple has low tax rate than if filing tax return seprately . That is the single most reason for saving on tax . For example , say you earn $ 20,000 and your spouse also earn $ 20,000. The following table shows the tax benefits for Year 2016

income earned Amount filing tax return seprately filing return jointly as couple Savings
Husband $20000 928 +1609=$2537 $ 9573 $1271  (2573 +8271-9573)
Wife $50000 928 +1609=$8271

So, when you and your spouse files tax return jointly, you pay less tax on account of falling under  higher income thresholds set under tax rate .

2. Higher Standard Deduction

Married couple can enjoy higher amount of standard deduction while computing taxable income. For example for the Year 2016,  Standard Deductions for  married couple filing tax return jointly is  $12,600 whereas when they file single can enjoy merely  $6,300 .

3. Contribute to IRA Evenif You are Unemployed

Individual Retirement Account or IRA contribution is a major tax saving for employed person. Theer is limit on how much you can contribute under IRA and then the deduction of traditional IRA contribution is based on the nature of tax filing . .  So, there are two distinct benefit for married person filing joint return

  1. Even if not employed, you can contribute to IRA as a couple i.e married to an employed spouse.
  2. The deduction for person filing return jointly gets higher deduction of traditional IRA contribution . Deduction of traditional IRA is based on Modified Annual Gross Income (MAGI) . In case of married couple filing joint return threshold is fixed at $98,000 whereas for single filing it is merely $ 61,000. Following table shows the difference clearly :

Please read IRA Contribution Limit : 4 Good Points to Know About for knowing the deduction limit as well as contribution limit based on the fact whether you are filing tax return as single or as couple.


4. Higher charitable contribution deductions

There’s a limit to the charitable contributions that may be deducted in a year, based on income.In most of  states in USA , married couples can file separate returns to take advantage of deductible contributions by having one spouse itemize all donations. However, both spouses must file itemized returns. Since ,the same income limits apply to each spouse, a good tax planning to let the higher earning spouse claim all the deductions for charitable donations.

5. Estate Tax Savings

Estate tax is harsh reality. Marriage can really help  here. When one  leaves money or wealth to a spouse , there is no tax liability as far as estate tax is concerned. In other words, there is no problem of estate tax on deceased’s estate until the spouse dies.

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