9106 / What are the income tax consequences that should be considered by a couple before they legally marry?

In some cases, however, choosing to marry and file a joint return can actually increase tax liability. Unmarried couples (regardless of sex) generally have the opportunity to file two single (or two head-of-household) tax returns without worrying about the “marriage penalty” for filing separately that applies to a legally married couple.

As a result of the Supreme Court’s ruling in Obergefell v. Hodges, same-sex couples now must make the same cost-benefit analysis that applies to opposite-sex couples in determining whether to file jointly. A single taxpayer crosses the earnings threshold into the 37 percent tax bracket when he or she earns more than about $500,000 for the year (this amount is adjusted annually for inflation)—meaning that two single taxpayers could live together and earn approximately $1 million before entering into the highest income tax bracket. Two married people, on the other hand, become subject to the 37 percent rate when they have combined earnings of only approximately $600,000 (as adjusted for inflation) for the year.

The investment income tax will also apply to a married couple earning a combined $250,000 (while two unmarried taxpayers can earn $400,000 before crossing the threshold). See Q 8635 to Q 8656 for a discussion of the investment income tax.