Taxes and Your Love Life: Why it Matters

04.25.08 | Taxes | 2 Comments | by Fred Siegmund

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The federal income tax used to have what came to be known as the marriage tax. If two single people earned $25,000 each and then got married, they paid more tax on $50,000 of combined income than they paid as two single people.

Quite a few years ago, Congress began tinkering with the tax rate schedules to eliminate the marriage tax. In 2007, a couple with two $25,000 incomes and the standard deduction will pay $4,092.50 in tax by filing jointly as a married couple with $50,000 of joint income. If they file separately as a married couple, they will each pay $2,046.25, which combined also equals $4,092.25. If they were both single they still pay the same combined tax.

The numbers tell the story. Congress decided that two single people who get married should pay the same tax on their combined income. But should a single person pay the same tax as a married couple with the same income?

If a single person earns the same $50,000 dollars as the couple above, he or she pays $6,736.25. The single person pays $2,643.75 more tax than the married couple with the same income.

Congress seems to be telling us that it is right that married couples keep more income since they have more expenses for food, medicine and so on. One difference of the tax comes with the personal exemption and the size of the standard deduction. The single person gets $3,400 exemption and $5,350 deduction for $8,750, but a married couple gets double that at $17,500. The single person has taxable income of $41,250 compared to $32,500 for the couple.

However, if we eliminate the difference in exemptions and deductions for the single person so that both have taxable incomes of $32,500, the single person still pays more: $456.25 more. The single person pays additional tax because they encounter the 25% tax rate much sooner than the married couple.

The difference gets more important at more modest incomes. A single person earning $25,000 pays $2,046.25 in federal tax while a couple filing jointly would pay only $750.00.

Those are critical dollars that might take the rent money, especially when both have $1,912.50 social security taxes on top of their income taxes. Now Congress seems to be telling us that people of modest incomes must scrimp and save: maybe double up and share living quarters.

Maybe now there is a single person tax? You be the judge.

Fred Siegmund covers America's jobs as part of work doing labor market analysis and projections for a client base of recruiters, trainers and counselors. Visit him at

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