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I know that there is a tax advantage to having a child on December 31st at 11:59 as opposed to January 1st at 12:01. Does the same hold true for marriage? If it matters I make ~$130,000/yr and have a rental property and a home, and my girlfriend is in school so is making -$40,000/yr and has effectively no assets.

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    Do you mean she is making -$40k as in has expenditure of $40k? Or ~$40k as in earning roughly 40k? – perennial_noob Jun 20 at 19:53
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    @davidbak: AFAIK, there is no legal/tax requirement to celebrate your anniversary exactly on your wedding date, you are free to do it a few weeks earlier/later. (however, this might also impact your marriage depending on how your spouse thinks about this.) – user35113 Jun 21 at 16:38
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    I agree 100% with the statement made elsewhere about not letting the "tax-tail" wag the "marriage-dog". After 30 plus years, my wife and I have concluded it was a bad idea to get married in early January. It was "for reasons" a necessity, but it makes vacation trips in later life suck if you're in the northern hemisphere. Venice is one of the most romantic cities in the world, what could be nicer than a gondola ride on your 25th anniversary to a Michelin starred restaurant in Piazza San Marco? Just about anything, because it's bone chilling COLD at that time of year. – dgnuff Jun 21 at 17:17
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    @AbraCadaver, you use a Married filing status if you are married on the last day of the tax year, not when you file the return. – prl Jun 21 at 17:58
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    The one area I'm not seeing mentioned is any financial aid that the soon-to-be-wife gets. Unless she is under 25 (then her parents income counts) it is her income that determines financial aid awards, etc (grants and scholarships, not loans). So not having your income associated with her for an extra calendar year may be beneficial, depending exactly on what she's doign in/with school, how it is funded, etc. – ivanivan Jun 21 at 18:34
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It's easy to get a rough but practical answer for this yourself. As an exercise, do your taxes now, estimating income or other factors through the end of the year, as if you were both single. Then do the same, but married filing jointly. Compare the results.

I was married last year (for the 2nd time) and did this comparison "for fun" (it didn't impact our choice of date - I was just curious about the difference). We ended up with an advantage of owing roughly 4% of our AGI less than if we had not been married and had filed individually. That's a significant amount of money! Of course, your mileage may vary, but since filing status is determined based on your standing as of December 31, and marriage generally results in a tax benefit, getting married on the 31st means you can file as married for that tax year and take advantage of those benefits, for the entire tax year.

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    This is the right answer because the only way to be sure if marriage is beneficial or detrimental to your taxes is to actually calculate it. If you make similar incomes like my family, it could actually mean more taxes. – mao47 Jun 21 at 12:09
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    Generally the less even the incomes are the more it makes sense (but generally you shouldn't make decisions based on general advice). – xyious Jun 21 at 21:12
  • I recently did a similar calculation and found that the tax savings was enough to pay for a substantial portion of the marriage ceremony. – chicks Jun 24 at 18:21
46

Generally there are tax benefits from filing as a married couple, specifically if one spouse has a very different salary. It can pull you into a lower tax bracket overall since everything (brackets, deductions, etc.) is roughly doubled, so one spouse gets the benefit of any "unused" margin that the other would not get to use as an individual.

That said...

To paraphrase JoeTaxpayer's catchphrase - "Don't let the tax tail wag the marriage dog". Marriage is a serious institution (at least it is for me). Don't rush into it just to get a little bit of a tax break.

  • Comments are not for extended discussion; this conversation has been moved to chat. – GS - Apologise to Monica Jun 23 at 19:04
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    +1 for Marriage is a serious institution - tax shouldn't be considered relevant. That said, the question mentions that this is happening anyway, so it's much more reasonable than a "should I get married" question. – Shadow Jun 24 at 0:44
  • Not going to lie, I am strongly opposed to the government being involved in marrage in any way, but if they are going to pay me to be married, you better believe I'm going to take that cash and laugh all the way to the bank. – Sam Jun 24 at 2:23
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Having just done this, the tax benefits are minimal. We got married in December (to fit our schedules, not taxes), and have a big gap in salaries.

I think we got around an additional 2-3% of our combined income back in taxes, but it's only due to the split in our income (split 13%/87%) and the effect of progressive tax rates.

Overall, we saved a lot more by finding a good venue.

3

Certainly run the numbers both ways to get a rough idea. Would you hit the state and local tax deduction limit ("SALT") of $10K on your own? If yes my guess is that you're better off not being married this year since you'll be able to itemize, but maybe not once you're married due to the SALT limit staying at $10K for both single or married.

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    Our 25th anniversary is coming up. We are choosing between a cruise and a divorce. The divorce would save us enough in taxes to take a cruise every year, on the anniversary of... our divorce. Between SALT cap, Real Estate deduction phaseout, rules of ACA, etc, huge savings. Crazy. – JTP - Apologise to Monica Jun 21 at 13:10
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    @JoeTaxpayer hah! Yeah, I don't understand the reasoning behind the new SALT cap marriage penalty, or any marriage penalty... Though admittedly in most cases marriage probably does help. – TTT Jun 21 at 13:26
  • @JoeTaxpayer: FWIW, if the SALT nonsense is what's leading to your divorce, you might want to see what happens in next year's elections. If the White House & Senate both switch hands (which at least seems plausible), those tax penalties are likely to be reversed. – GreenMatt Jun 21 at 15:50
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    @davidbak: Often divorce is difficult, but not always, depending on the circumstances and people involved. From Joe Taxpayer's comment above, it seems that he and his wife plan to stay together as a couple. However, they are considering a divorce as a legal move so they can reduce their exposure to the SALT rules. I think those rules will change, if enough politicians in the correct offices in Washington are voted out next year. – GreenMatt Jun 21 at 16:54
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    If things change, they can always remarry :-) – Andrew Leach Jun 22 at 9:44

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