How Marriage Affects Your Taxes: Filing Status Guide

Marriage Changes Everything About Your Taxes

Getting married is not just a personal milestone. It is a major tax event. Your filing status, available deductions, credit eligibility, tax bracket thresholds, and even how you handle retirement accounts all change the moment you say "I do." The good news is that married couples often pay less in taxes than they would as two single filers. The less good news: not always.

Your Filing Status Options

If you are legally married on December 31 of the tax year, you have exactly two federal filing options:

Married Filing Jointly (MFJ)

Both spouses combine all income, deductions, and credits on a single return. For most couples, this is the better option. Benefits include:

Higher standard deduction: $30,000 (vs $15,000 for single)

Wider tax brackets: The 22% bracket extends to $206,700 (vs $103,350 for single)

Full access to the Earned Income Tax Credit, Child Tax Credit, education credits, and student loan interest deduction

Higher income thresholds for IRA deductibility and Roth IRA eligibility

Ability to file jointly even if one spouse had zero income

Joint and several liability: Both spouses are responsible for the accuracy of the return and for paying any tax owed, even if one spouse earned all the income. If you later divorce and the IRS finds an error, both of you are on the hook. Innocent spouse relief (Form 8857) is available in some situations.

Married Filing Separately (MFS)

Each spouse files their own return reporting only their income and claiming only their deductions. MFS is rarely advantageous but makes sense in specific situations:

Student loan income-driven repayment: MFS may result in lower monthly payments since only one spouse's income counts

Medical expense deduction: If one spouse has high medical expenses and low income, MFS may allow them to exceed the 7.5% AGI threshold more easily

Liability concerns: If you suspect your spouse is underreporting income or claiming fraudulent deductions, MFS protects you from joint liability

Separation or pending divorce: Keeps finances separate during a transition period

Drawbacks of MFS are significant: you lose the EITC, education credits, student loan interest deduction, and adoption credit. Roth IRA income limits drop to effectively zero. If one spouse itemizes, both must itemize. The standard deduction is halved to $15,000.

The Marriage Bonus and Penalty

Marriage Bonus

A marriage bonus occurs when one spouse earns significantly more than the other. The lower earner's income fills up the lower brackets that would otherwise be unavailable.

Example: Alex earns $150,000 and Jamie earns $30,000.

As two single filers:

Alex's tax (taxable income $135,000): approximately $24,800

Jamie's tax (taxable income $15,000): approximately $1,500

Combined: $26,300

Filing jointly:

Combined taxable income ($180,000 - $30,000 standard deduction = $150,000): approximately $23,400

Tax savings from marriage: approximately $2,900

Marriage Penalty

A marriage penalty occurs when both spouses have similar high incomes and their combined income pushes more into higher brackets.

Example: Both spouses earn $200,000.

As two single filers: Each pays approximately $36,800 = $73,600 total.

Filing jointly: Combined income of $400,000 with $30,000 standard deduction = $370,000 taxable. Tax: approximately $76,200.

Marriage penalty: approximately $2,600

The penalty is most pronounced at very high incomes and when spouses earn similar amounts. The 2017 tax reform reduced but did not eliminate the marriage penalty.

Tax Planning Strategies for Married Couples

1. Maximize Both Spouses' Retirement Accounts

As a couple, you can contribute up to $47,000 to two 401(k) accounts ($23,500 each) or $62,000 with catch-up contributions. If one spouse does not work, they can still contribute to a spousal IRA based on the working spouse's earned income. This doubles your tax-advantaged savings.

2. Coordinate Roth and Traditional Contributions

Create tax diversification by having one spouse contribute to a traditional 401(k) (reducing current taxes) while the other contributes to a Roth 401(k) (creating tax-free retirement income). This gives you flexibility to manage tax brackets in retirement.

3. Gift Splitting

Married couples can each give $18,000 per recipient per year (2025) without filing a gift tax return. Together, that is $36,000 per person. For families transferring wealth, this doubles the annual exclusion.

4. Optimize Capital Gains

The 0% long-term capital gains rate applies to married couples with taxable income up to $96,700. If one spouse has investment gains, managing the couple's combined income to stay below this threshold can eliminate capital gains tax entirely. Use the stock sale tax calculator to model scenarios.

5. File the Right Status Each Year

Run the numbers both ways every year. While MFJ usually wins, life changes (large medical bills, student loan strategies, approaching divorce) may make MFS better in a particular year.

The Newlywed Tax Checklist

Immediately After Marriage

Update your W-4: Both spouses should submit new W-4 forms to their employers. Use the IRS estimator or Taxation.ai's calculator to determine new withholding amounts. Failure to update can result in significant under-withholding.

Notify the Social Security Administration: If you changed your name, your new name must match SSA records for your tax return to process correctly. File Form SS-5.

Update bank accounts and beneficiaries: Add your spouse to relevant accounts and update retirement account beneficiary designations.

Before Filing Your First Joint Return

Gather both spouses' tax documents: W-2s, 1099s, and records from all income sources

Compare MFJ vs MFS: Calculate both and choose the better option

Review eligibility for new credits: Marriage may qualify you for credits you could not claim as a single filer, or vice versa

Coordinate deduction strategies: Decide jointly whether to itemize or take the standard deduction

Ongoing Annual Planning

Review retirement contribution strategies together each January

Coordinate charitable giving for maximum deduction benefit through bunching or donor-advised funds

Align investment strategies for tax efficiency across both spouses' portfolios

Plan together for major purchases and their tax implications (home, business, education)

Special Situations

Military Spouses

Under the Military Spouses Residency Relief Act, military spouses may maintain their home state residency for tax purposes, even when living in a different state due to military orders. This can save significant state taxes if the home state has no income tax.

Same-Sex Married Couples

All married couples are treated identically for federal tax purposes since the Supreme Court's ruling in Obergefell v. Hodges. Some states may have different rules, but federal filing is based on legal marital status.

Married in December, Filed Jointly for the Full Year

If you married on December 31, you are considered married for the entire tax year. Even a late-December wedding affects your filing status for all income earned that calendar year.

Run the Numbers with Taxation.ai

Taxation.ai automatically calculates both MFJ and MFS scenarios, shows you the tax impact of each, and recommends the filing status that minimizes your combined tax liability. The platform also identifies marriage-specific planning opportunities and ensures both spouses' tax situations are fully optimized as a unit.