Marriage affects your taxes in many ways — sometimes for better, sometimes worse. Here's how couples can optimize their tax situation.

Tax Planning for Married Couples

The Marriage Bonus

Couples where incomes are very unequal often pay less tax than as two singles — the "marriage bonus."

The Marriage Penalty

Couples with similar high incomes may owe more than as singles — the "marriage penalty."

MFJ vs. MFS Strategy

Usually MFJ is better, but consider MFS when:

One spouse has very high medical expenses (lower AGI threshold helps)
One spouse has student loans on income-driven repayment
Separating income benefits one spouse's specific credits
Liability concerns (each spouse only liable for their own tax under MFS)

Income-Splitting Strategies

Pay the lower-income spouse a salary through the family business
Shift investments to the lower-income spouse (lower capital gains rates)
Contribute to the lower-income spouse's IRA

Spousal IRA

A non-working spouse can contribute to their own IRA based on the working spouse's earned income.

Estate Planning

Unlimited marital deduction: Assets pass to a U.S. citizen spouse free of estate tax. Both spouses get their own $13,990,000 estate tax exemption (portability).

Newlyweds: Update These

Name change with SSA and IRS
W-4 withholding with employer
Beneficiary designations
Filing status

Recently married or approaching marriage? A tax checkup can optimize your combined finances.

Tax Planning for Married Couples