Tax Deductions & Benefits for Married Couples

The marriage tax penalty has been widely publicized, but tax law changes have made the penalty less of a problem, particularly for people in the lower tax brackets. In fact, getting married entitles many people to some tax benefits that they did not enjoy previously. To take advantage of most of these benefits, you must file a joint income tax return with your spouse, as most married couples will end up paying a higher amount in income taxes if they file separately.

The Marriage Benefit

As of December 2012, the cutoff points for the lower tax brackets, 10 percent and 15 percent, are exactly twice as high for married couples as for single people. If you earn $50,000 per year and are single, you are in the 25 percent tax bracket, and $14,650 of your income is taxed at that higher rate. If you marry someone who earns $20,000 per year, your combined income of $70,000 as a married couple is completely in the 15 percent tax bracket, saving you $1,464 in taxes.

Higher Itemized Deductions

While the standard deduction for married couples is twice that of a single filer, you may have an opportunity to claim more itemized deductions together. A single filer can claim a standard deduction of $5,950. If one spouse had itemized deductions of $5,000, as a single taxpayer he would be better to claim the standard deduction. But if his spouse had $13,000 in itemized deductions, he gains by itemizing. Combined, this couple has $18,000 in itemized deductions, much higher than the $11,900 allowable as a standard deduction for married couples.

Spouse's Health Benefits

When you get married, you can secure health insurance coverage through your spouse's plan at work. A spouse's health benefits are tax-free. If you claim benefits as a domestic partner, the value you receive for these health benefits is taxable income.

Student Loan Interest

Getting married increases the income threshold for student loan interest deduction. A single person with $75,000 per year in modified adjusted gross income cannot deduct his student loan interest, because his income is above the $60,000 threshold for single filers. If he gets married to someone who has $25,000 in income, the combined household income of $100,000 as a married couple allows him to now deduct his student loan interest because it is below the $120,000 threshold for married couples filing jointly.

Capital Gains and Losses

If you have capital gains that are subject to taxes in the year that you get married, and your spouse has capital losses for the year, the losses of one spouse can offset the gains of the other. Normally, the deduction limit in any year for capital losses is $3,000. If one spouse has a capital loss of $6,000, and he marries a person with a capital gain of $8,000, the couple has to pay taxes only on the net gain of $2,000. Essentially, the entire amount of the $6,000 loss experienced by the first spouse was deductible as a married couple.

Spousal IRA

If you did not have earned income as a single person, you can not contribute to an IRA account. If you marry someone with earned income, you can now contribute to your own IRA account as a spousal account. With a traditional IRA account, this spousal IRA contribution may be deductible on your income tax.