The information in this article is up to date through tax year 2018 (tax returns filed in 2019).
Getting married changes a lot of things. It is an exciting time, but after all the adrenaline dissipates, you have to make a lot of decisions. One of the more important ones is how you will file your taxes. In 2018 you still have to decide whether to file separately or jointly if you’re married. What you know about previous years might not be true anymore due to the Tax Cuts and Jobs Act.
Income Tax Brackets
Before Tax Reform (2017): Getting married changes your tax filing status. You could choose to file as married filing separately, but the tax rates for married filing jointly are generally lower.
If you filed as married filing separately on your tax return for tax year 2017, the tax rates were as follows:
|10%||Up to $9,325|
|15%||$9,326 – $37,950|
|25%||$37,951 – $76,550|
|28%||$76,551 – $116,675|
|33%||$116,676 – $208,350|
|35%||$208,351 – $235,350|
|39.6%||$235,351 and up|
If your filing status was married filing jointly in 2017, the income thresholds were as follows:
|10%||Up to $18,650|
|15%||$18,651 – $75,900|
|25%||$75,901 – $153,100|
|28%||$153,101 – $233,350|
|33%||$233,351 – $416,700|
|35%||$416,701 – $470,700|
|39.6%||$470,701 and up|
After Tax Reform (2018): The tax brackets for tax year 2018 have changed for all filing statuses. The income range in each bracket has expanded, and the rates have dropped across the board. Tax rates for married filing separately now look like this:
|10%||Up to $9,525|
|12%||$9,526 – $38,700|
|22%||$38,701 – $82,500|
|24%||$82,501 – $157,500|
|32%||$157,501 – $200,000|
|35%||$200,001 – $300,000|
|37%||$300,001 and up|
If filing married filing jointly, your income rate will be:
|10%||Up to $19,050|
|15%||$19,051 – $77,400|
|25%||$77,401 – $165,000|
|28%||$165,001 – $315,000|
|33%||$315,001 – $400,000|
|35%||$400,001 – $600,000|
|39.6%||$600,001 and up|
The Standard Deduction
Before Tax Reform (2017): If you filed as married filing separately on your tax return for 2017, the standard deduction for you was worth $6,350. If you filed as married filing jointly, it was $12,700.
After Tax Reform (2018): The Tax Cuts and Jobs Act increased the standard deduction to $12,000 for married filing separately. It is now $24,000 for married filing jointly.
If you chose to itemize instead, your deductions will look very different after tax reform as well. Learn more about the major changes affecting below-the-line deductions here.
The Personal Exemption
Before Tax Reform (2017): In 2017, the Personal Exemption allowed you to lower taxable income by $4,050 per person, including the taxpayer. If you and your spouse claimed no other dependents, that amounted to $8,100 for your household, whether you filed jointly or separately.
After Tax Reform (2018): Since tax reform, the Personal Exemption has been eliminated. You cannot use it to lower your taxable income.
The Marriage Penalty or Bonus
Before Tax Reform (2017): The “marriage penalty” (or bonus) is simply a term that refers to the change in a couple’s total tax bill. It is not a literal penalty issued by the IRS. A marriage penalty occurs when two individuals filing a joint return pay more tax than they would if filing single. This happens most frequently when both spouses make a similar amount of income. A marriage bonus occurs when two people filing together receive a bigger refund than if they file as single. This usually happens when two people earning very different incomes get married.
After Tax Reform (2018): The risk of experiencing a “marriage penalty” has decreased since tax reform. The new tax bracket structure expanded the income ranges in each bracket. And the standard deduction is now double what it was in 2017, which lowers taxable income for you and your spouse. So depending on your circumstances, combining income may not bump you into a higher tax bracket at all.
If you are legally separated from your partner or in the process of getting a divorce during tax season, you should file married filing separately. This way, you won’t be liable for your ex-partner’s taxes.
Reporting and Deducting Alimony
Before Tax Reform (2017): Prior to the tax law changes, any alimony payments paid by you were deductible on your federal income tax return. Alternatively, if you received alimony, you had to report that as taxable income.
After Tax Reform (2018): The new tax law about alimony applies to divorces and settlements made after Dec. 30, 2018. Under the TCJA, alimony payments paid out cannot be deducted from your income for tax purposes. If you are the one receiving alimony, you don’t have to report those payments as income. Note: if you have an existing agreement but you change it after this date, this law will still affect you if your new agreement states that the TCJA treatment of alimony payments applies.
An important reminder for all newly married couples: If you are planning on taking the last name of your spouse, make sure to report it to Social Security and apply for a new card. Do this well before tax season so social security can report it to the IRS.