Tax laws treat married couples differently from single people, and in some cases, couples will end up paying more after they marry than they did when they were single. This phenomenon is known as the marriage penalty, and it most often happens when the two spouses each have similar and fairly high amounts of income.

However, as you'll see, there are some instances in which marriage penalties apply even to low- and middle-income taxpayers.

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Why the marriage penalty happens

The reason some taxpayers pay a marriage penalty has to do with the way the tax brackets are set up. For the 10% and 15% brackets, the income limits for each bracket for married couples are exactly double the corresponding limits for single filers. However, for the 25% brackets and above, the married amounts are less than double the single amounts. Therefore, if the two spouses were both in the 25% bracket or higher before they married, then there's a chance they'll owe a marriage penalty.

An example can make this clearer. Say that two individuals had taxable income of $100,000 before they married. Their tax will be $21,037 each, for a total of $42,074. However, if they marry, then their combined taxable income of $200,000 will generate tax of $42,986. That adds up to a marriage penalty of $912.

Why does the married couple pay more than $900 in extra tax? The short answer is that a bit more than $30,000 of their combined income gets taxed at a higher 28% rate after they're married, compared with what was in that higher bracket when they did their returns as single filers before they tied the knot.

Other tax laws that can cause a marriage penalty

The tax brackets are the primary reason some taxpayers pay more after they get married. But it's not the only one. In particular, high-income taxpayers have a host of additional considerations to take into account. Consider the following:

  • Two surtaxes under the Affordable Care Act included a 0.9% surtax on wages and other earned income, as well as a 3.8% tax on investment income. The income thresholds for both of these surtaxes are the same: $200,000 for single filers, and $250,000 for married couples filing jointly. Therefore, singles who both earn between $125,000 and $200,000 can end up getting hit with extra tax after they get married as a result of these provisions. Those who have income above those limits will end up having to pay the tax on a correspondingly larger amount of their combined income.
  • There are provisions that reduce the amount of itemized deductions and personal exemptions that high-income taxpayers are allowed to claim on their tax returns. As with the ACA-related taxes, these deduction-cutting provisions start to apply at different income thresholds for singles versus couples. For 2016, the point at which these provisions start to increase taxes is $259,400 for single filers and $311,300 for joint filers. If getting married puts you above the latter figure, then you could end up getting penalized for tying the knot.

In addition, there are provisions that create a marriage penalty for those with extremely low levels of income. The most common involves the earned income tax credit, which pays the largest amounts to families with young children. Because of the way the credit is calculated, the income at which a married couple is entitled to take the same credit as a single parent is far less than double the income level for singles. Therefore, getting married can lead to combined income that reduces or entirely eliminates the allowed credit.

What to do

The only way to avoid marriage-penalty issues is to consider them in your decision about getting married. Your marital status as of the end of the tax year is determinative for figuring out your filing status, so in some cases, a delay or acceleration in tying the knot can make a year's difference. Longer-term, though, couples have to face the rather unromantic prospect of changing their marriage plans if tax planning is that much of a priority.