Do married couples pay less in taxes than singles living together? if yes how much in % terms?

Answer 1

This is the "marriage penalty" ... they pay more because they're moved into a higher tax bracket... if we had a flat tax (X% for everyone), we wouldn't have this problem.

Answer 2

Actually, a married couple will generally pay higher taxes than two singles living together, assuming that both work and incomes are similar. The difference can vary from minimal to substantial.

I have two friends who are both single parents. They each earn around $18k a year and each has 2 kids from previous relationships. If they were to get married, the tax bite for them would be nearly $10,000 a year greater than it is as singles filing Head of Household and collecting the EIC.

Welcome to the "Marriage Penalty" or "Marriage Tax"

Answer 3

For the 2006 tax year, for couples with taxable income under $123,700, as far as tax rates go, there is no tax advantage or disadvantage to being married. At higher income levels, there's a disadvantage.

The standard deduction has been changed so that married is exactly twice the single rate, so there's no longer a disadvantage there.

Tax rates for married and single are equivalent until you reach a taxable income of $123,700. After that, there's a disadvantage to being married.

When you get to the various credits and phaseouts, it gets more complicated. Some give an advantage to singles, some to marrieds, and some give no advantage to either.

Since each situation is different, you may or may not get a net tax benefit from being married. I did the year I got married, but not everyone does.

Answer 4

Short answer: No (usually).

Married copules usually pay more, but it depends on the income status. If both people earned a combined income of less than $63,700 then single and married couples pay the same tax.

If combined income > $63,700 then married couples pay more. However, there is one exeption. If only one person in the couple works and makes more than $77,100 a year and the other stays home and bring none or very little income then the married couple will pay less taxes.

Its confusing, but it depends on the person's income.

Answer 5

Not always. It totally depends on each individual situation. How many dependents live in the household, how much money each one makes, whether they own a home, what deductions they can claim. There is no yes or no answer to your question.