Marriage Penalty

A A A

DEFINITION

The increased tax burden for married couples compared to when they were filing seperate tax returns as singles. Progressive tax rate structures in the United States led to a situation where higher income individuals and couples pay higher taxes than their lower income counterparts. The marriage penalty has been at the center of many political debates and the United States governement has taken steps to resolve the taxation discrepency.

INVESTOPEDIA EXPLAINS

The fact that married couples tend to pay more in taxes than single filers is debatable. However, some believe that the marriage penalty has led to greater consideration by couples to avoid marriage.


RELATED TERMS
  1. Marital Deduction

    A tax deduction that allows an individual to transfer some assets to his or ...
  2. Standard Deduction

    A base amount of income that is not subject to tax and that can be used to reduce ...
  3. Marital Property

    A U.S. state-level legal distinction of a married individual's assets. Property ...
  4. Head Of Household

    A status held by the person in a household who is running the household and ...
  5. Income Tax

    A tax that governments impose on financial income generated by all entities ...
  6. Marital Trust

    A fiduciary relationship between a trustor and trustee for the benefit of a ...
  7. Form 8857: Request For Innocent ...

    An IRS tax form used by taxpayers to request relief from a tax liability involving ...
  8. Defeasance Clause

    A mortgage provision indicating that the borrower will be given the title to ...
  9. Financial Infidelity

    Financial infidelity occurs when couples with combined finances lie to each ...
  10. Legal Separation

    For all practical purposes, a circumstantial divorce without a legal decree. ...
Related Articles
  1. 10 Steps To Tax Preparation
    Taxes

    10 Steps To Tax Preparation

  2. Happily Married? File Taxes Separately!
    Taxes

    Happily Married? File Taxes Separately!

  3. 10 Money-Saving Year-End Tax Tips
    Taxes

    10 Money-Saving Year-End Tax Tips

  4. Can I add my higher income spouse's ...
    Retirement

    Can I add my higher income spouse's ...

  5. Divorce Over 50: Seven Mistakes to Avoid
    Retirement

    Divorce Over 50: Seven Mistakes to Avoid

  6. Eight Financial Safeguards If Disaster ...
    Personal Finance

    Eight Financial Safeguards If Disaster ...

  7. Must-Do Financial Moves For Same-Sex ...
    Taxes

    Must-Do Financial Moves For Same-Sex ...

  8. How Women In Transition Should Mind ...
    Retirement

    How Women In Transition Should Mind ...

  9. Financial Changes When You Marry
    Personal Finance

    Financial Changes When You Marry

  10. Learn About These 6 Dumb Money Pitfalls ...
    Personal Finance

    Learn About These 6 Dumb Money Pitfalls ...

comments powered by Disqus
Hot Definitions
  1. Amplitude

    The difference in price from the midpoint of a trough to the midpoint of a peak of a security. Amplitude is positive when calculating a bullish retracement (when calculating from trough to peak) and negative when calculating a bearish retracement (when calculating from peak to trough).
  2. Ascending Triangle

    A bullish chart pattern used in technical analysis that is easily recognizable by the distinct shape created by two trendlines. In an ascending triangle, one trendline is drawn horizontally at a level that has historically prevented the price from heading higher, while the second trendline connects a series of increasing troughs.
  3. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.
  4. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  5. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
  6. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
Trading Center