Getting married: What newlyweds need to know

10.08.2020 23:24

AOL.com

For the 2020 tax year, single people pay a rate of 37% on taxable income over $518,400.
For married couples filing jointly, that threshold is just $622,051 — far from double that available to single taxpayers. That's a significant marriage penalty.

The more unequal two spouses' incomes, the more likely that combining those incomes on a joint return will pull some of the higher earner's income into a lower bracket. That's when the marriage bonus occurs.
When two high-earning spouses have relatively equal incomes, the odds of getting hit with the marriage penalty go up.

You can't claim the Earned Income Tax Credit.
You can't claim education credits, including the American Opportunity Credit and the Lifetime Learning Credit.
You can't deduct student loan interest.
You can't claim the Child and Dependent Care Credit.
Your deduction for capital losses is limited to $1,500 (instead of $3,000 on a joint return).
If one spouse itemizes deductions, both must itemize — even if the standard deduction would result in a lower tax bill for the other spouse. You can't mix and match.

You can change your name with the SSA by filling out Form SS-5. Take the completed form into your local SSA office along with documents proving your identity and an original or certified copy of your marriage certificate.
If you're up against the tax filing deadline and haven't yet changed your name with the SSA, you can still file a joint return with your spouse. Just be sure to use the name shown on your Social Security card.

To avoid paying taxes on up to $250,000 profit from selling a home, one spouse must have lived in and owned the house for at least two of the last five years.
To qualify for the larger $500,000 tax-free gain, both spouses must have lived in the home for at least two of the last five years, and at least one spouse must have owned the home for at least two of the last five years.