If you have been filing a Joint Federal Income Tax Return, with your Spouse, over the years, you might have heard the terms; Marriage Tax and Marriage Penalty.  As someone who has worked in the Personal Finance Arena, and has always done our Taxes myself, I have never tried to determine the difference–and whether we were doing the right thing.  Perhaps, I was just happy to be through with Taxes.

Yes, I could have gone to a CPA; but, his or her Bill probably would have been higher than any benefits that we might have received. Actually, I could have run our returns–both Individual and Joint–on TurboTax and answered that question myself.

I’ve looked at several versions of the analysis–both with a couple having combined Annual Incomes of $200,000 and $60,000, and with the same number of dependents and deductions.  In both cases, if one Spouse earns all or the bulk of the money, the result would generally be a Tax Bonus–with lower Taxes Payable.  If both Spouses earn similar amounts, it would generally result in a Tax Penalty–with higher Taxes Payable.

I have linked one version, from Tax Policy Center,  Obviously, as always, I recommend that you consult with your own Tax Advisor on specific questions.



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