Researching the presidential candidates for 2008, I keep hearing about whether or not each candidate plans to repeal the "marriage tax". My question is, since current policy allows for "Married, filing separately", is this really even an issue? Or am I misunderstanding the concept of "married, filing separately"? Isn't that an option for married couples that allows them to be taxed as if they were single while they're still 100% married, thus dodging the supposed "marriage tax"? If so, then what's the issue?
2007-10-05 14:37:14 · 6 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
If you are married filing jointly, or married filing seperately, you pay a higher tax %. Meaning a single person making that same amount pays less income tax.
That is what they mean by the Marriage tax. Check it out for yourself. Go to www.irs.gov. Download form 1040 instructions, and look at the income tax tables on pages 60-78.
2007-10-05 15:31:36 · answer #1 · answered by Anonymous · 1⤊ 0⤋
Not true that married filing separately is the same as single - some of the rates are different, and there are some credits you can't take if you file as married filing separately.
For some people's situations, there is a "marriage tax" where by being married they pay more taxes that they would if they weren't married. For many other people it goes the other way - they do better by being married and filing a joint return than they would if they were single.
2007-10-05 15:05:14 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
Until recently, there was a "Marriage Tax." The "Marriage Tax" refers to the amount of increased standard deductions that 2 "Single" people had when compared to a couple that filed as "Married-Filing Jointly."
For example, in 2000, the standard deduction for a Single filer was $4400 while the standard deduction for Married-Filing Jointly was $7350. Two single filer living together would get a combined standard deduction of $8800. This is $1450 more in deductions that were available to the Single people.
When you multiply $1450 by the marginal tax rate of the married couple, that is the "Marriage Tax."
I hope this explains it.
2007-10-06 01:36:16 · answer #3 · answered by Steve 6 · 1⤊ 0⤋
Married, Filing Jointly, gets the lowest tax bill.
If you want to pull certain shenanigans with your taxes, you file Married, Filing Singly, which is higher than Married, Filing Jointly. In fact, it's even higher than Single.
To my way of thinking, a couple where one earns $60,000 and the other earns nothing is richer than a couple where one earns $32,000 and the other earns $28,000. I'd eliminate the "filing jointly" business, and have everybody file separate income taxes.
Of course, if we *really* had some sense, we'd eliminate income tax in favor of VAT. VAT is refunded on products that are exported. Currently, countries with a VAT have a price advantage in the world market over countries like the US, which do not.
2007-10-05 14:50:38 · answer #4 · answered by Anonymous · 0⤊ 1⤋
If both spouses are wage earners they will pay more tax if they file as married filling separately or married than they would if the were not married and could each just file as single. A married couple will pay more tax than two people who just live together and don't get married. The effect is that the government penalizes you for being married. It is a real problem every year I figure our taxes both ways so I will no how much we are being penalized.
2007-10-05 14:52:10 · answer #5 · answered by Dash 7 · 0⤊ 2⤋
I don't know all the ins and outs, but I think my husband and I did Married-Seperately because he itemizes and I don't.
What it boils down to is that we pay more on our combined income "x+y" than would be the sum of the taxes on my single "x" income and his single "y" income.
2007-10-05 14:45:18 · answer #6 · answered by Anonymous · 0⤊ 0⤋