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The bachelor tax – what it costs in taxes to be single
- fragmede 8mo agoZero comments on this linking to diamond rings? Plug in $100,000 and $0, and it suggests some specific diamond rings of roughly that price. I hope that an affiliate link!
- wkaisertexas 8mo agoThose are not affiliate links. I just found the idea of the ring being paid for by the IRS funny.
- fragmede 8mo agoDammit, they should be!
- antisthenes 8mo agoWhat a terrible UX this site is. Don't make me enter the number or click the button every time. Just give me a slider for both incomes and show me the result right away.
- wkaisertexas 8mo agoA Federal Tax calculator I made after finding out my tax savings would be $12k if I married my girlfriend.
- bell-cot 8mo agoDepending on circumstances, you might save considerably more in other areas - being covered as a spouse on the other's employer health insurance, reduced car insurance rates, state & local tax savings, ...
- wkaisertexas 8mo ago12k in savings included about 6k in state tax savings because I am in California. Will add in state taxes if people end up using this
- SmoothBrain123 8mo ago[dead]
- toast0 8mo agoIf you stay married for at least ten years, and one spouse has a significantly better social security record, the other spouse can claim spousal benefits if your marriage is still in force or they are unmarried. Hard to value that though.
- deleted 8mo ago[deleted]
- vecinu 8mo agoDivorce is way more expensive than your savings. I went through this; you save $12-16k/yr for 10 years and if you invest the difference smartly, it's $300k. Without a prenup, and most don't cover earnings during your marriage anyway (They're hard to keep updated yearly), you're giving away half in California, which can be over $1M if you're a diligent saver and investor. Then if your spouse is REALLY nasty, you'll owe her spousal support that can be thousands per month, depending on your income (and income POTENTIAL), for the rest of her life (after 10 years of marriage in CA). Any cost savings are completely nullified by divorce if you're a high earner and almost never make sense. Don't get married for tax savings, marry for other reasons and have the most iron-clad prenup you can afford and get your partner to agree to. I promise you, your future self will thank you.
- imtringued 8mo agoActually, you don't care if your partner agrees to the prenup. You care that your partner's lawyer (you can't have the same lawyer for this) agrees to the prenup. The reason for this is that there are judges that are hostile to prenups and you need evidence that your partner made an informed and explicit agreement. Also don't add sunset clauses because those are ticking time bombs. There is nothing worse than having a stable marriage only for a looming deadline to change the incentives towards instability.
- cedws 8mo agoMarriage seems like a dated concept from when traditional gender roles were a thing, and men and women worked more as a team because they needed each other. Now that they don’t, with the high divorce rates and the high risks for men I can’t see a reason anyone would want to get married, especially outside the US where there’s minimal tax benefits.
- frenchman_in_ny 8mo agoSadly accurate - and what is worse is that child support laws by state [0] are actually even more dated in their mechanisms, where despite using an "income shares" model, most don't take custody & parenting time into account. So despite "savings" from a MFJ filing status, when you go back to Single filer or HOH filer, you're penalized on the child support side. [0] https://www.ncsl.org/research/human-services/guideline-models-by-state.aspx https://www.ncsl.org/research/human-services/guideline-model...
- cratermoon 8mo agoIt's about to get even worse: https://www.cbc.ca/news/world/birth-rate-trump-baby-bonus-1.7523545 https://www.cbc.ca/news/world/birth-rate-trump-baby-bonus-1....
- throwaway6734 8mo agoWhat's going to get worse? Currently parents get absolutely shafted by the tax system as the tax credits are next to nothing relative to the amount of time, effort, and capital it takes to raise a child. Currently the cost of raising children is privatized while the benefits are socialized.
- ryandrake 8mo ago[flagged]
- ActorNightly 8mo agoThe entire principle of conservatism is basically underpinned by personal insecurities, in every sector. This is why these people are so easy to exploit.
- stackskipton 8mo agoPart of it is religion/beliefs. However, other part of it is entire economic structure is designed to grow or line must go up. Easiest way to make sure line goes up to have more consumers and since many Western Countries have less consumers, this means entire economic system is going to have a reckoning which those in power don't want.
- carlosjobim 8mo agoEvery healthy living being both male and female has had this obsession since sexual reproduction began over thousand million years ago. All of your ancestors during a thousand million years have had this obsession. Are you sure it's not you who are weird?
- cosmic_cheese 8mo agoI wonder how many more failed tiny financial band-aids it will take before governments figure out that moving the needle on birth rate requires that deep systemic issues be addressed. The most astute observation I've seen on the topic is that in a capitalistic system in which monetary value is assigned to everything, the value of children is deeply negative and therefore they are not desirable. By having children, most couples are putting their stability, wellbeing, and long-term prospects on the line. The opportunity cost is staggering. If more children is the desired outcome, that tradeoff must cease to exist, and a lousy $2k isn't anything remotely close to that.
- coccinelle 8mo agoIt can be also a married person tax depending on your circumstances. If both spouses make similar amounts then they are getting taxed more as a married couple, because the bracket threshold for a married couple are less than 2x that for an individual. I don't understand why everyone is not taxed as an individual, regardless of marital status.
- zeroonetwothree 8mo agoTaxing as individuals is kind of unfair to single earner households, since the earner has to support more people it seems reasonable to tax them less. You could maybe accomplish a similar thing with deductions but there will still be some weird cases
- toast0 8mo agoAs a mostly single earner in a community property state, my spouse earns half the income for tax purposes. If you were going to tax individuals, it's probably reasonable to apply income evenly across marriages for all states.
- mikepurvis 8mo agoI supported a non-earning spouse for a decade in Canada and it's always been a bit murky. Like in 2014-2015 there was a concept of transferring up to 50k of income to the spouse ("Family Tax Cut"), but Trudeau's Liberal gov't canceled it when they came into power; I think they correctly recognized that it was basically a handout to families privileged enough to be in a position where there was enough spread between the two earners that transferring that sum would be significant. CRA is even pretty careful about letting a spouse claim capital gains income; it's always attributed back to whoever earned the original principal (outside of inheritance). I think the only way around this is to formally "loan" the spouse their investment money, but you have to charge them interest and the interest is of course income to you.
- graemep 8mo agoWe have exactly this problem in the UK. A couple each home earns x, each gets taxed on x. Each gets the tax free allowance on the fist £12.5k of the annual income. Each gets the full basic rate slice before they hit higher bands etc. If one of the couple earns 2x and the other zero, then only one can use their tax free allowance and they get one slice of the basic rate band etc. They still have the same pre-tax income for the same household. Personally I think people should be allowed to opt in to sharing taxable income.
- zeroonetwothree 8mo agoIf you have to pay NIIT it’s fairly disadvantageous to be married.
- wkaisertexas 8mo agoIf NIIT significantly outweighs the increase in your standard deduction, you probably already have a tax professional for questions.
- stego-tech 8mo agoI appreciate this, but now do one for non-traditional, multi-income households. I’d like solid numbers of how much I’m overpaying to do the work the government refuses to (sheltering folks, ensuring nutritious foodstuffs).
- deleted 8mo ago[deleted]
- alphazard 8mo agoOkay now factor in the probability of divorce, and the amount you get to keep afterwards, and discount it to present value, vs. paying more taxes and keeping it all. Also remember that you typically lose half of income forever, not just wealth in a divorce.
- bigfishrunning 8mo agoIt is important to understand the consequences of breaking any contract you enter into, including marriage. Luckily, you're not stuck with default terms to that contract, and if you're not comfortable with them pre-nuptual agreements can modify those terms.
- Ancalagon 8mo agoNot sure why this is being downvoted. It should be a very real consideration at least in the US.
- silexia 8mo agoThe best thing I have done in my life was get married and have kids. And money has nothing to do with that happiness.
- deleted 8mo ago[deleted]
- mgaunard 8mo agoTax works differently by country. In many cases there are no mechanism to pool your taxes with your significant other.
- wkaisertexas 8mo agoYep! This post was specific to US federal taxes. If people find this interesting, I will open-source and allow contributions to support other country's tax systems.
- smeej 8mo agoI don't get it. I keep getting $0. Maybe I'm not using high enough numbers? I used the example of $100k each, or then $100k and $80k, which is on the high side of the median where I live and the single vs. married end up the same.
- wkaisertexas 8mo agoYou are in the same tax bracket at $80 and $100k, so the amount that you would pay would be identical. Switching tax brackets is a categorical change which needs to occur before there is a difference.
- stackskipton 8mo agoMarriage benefit comes into play when couples have disparity in income. If you are both at similar incomes, it won't change much. However, punch in 200k and 50k and see the difference.
- cucumber3732842 8mo agoUnless the disparity is too big. Because then the lesser earning person loses state bennnies.
- Yizahi 8mo agoMy single's tax is approximately two monthly netto salaries per year.
- junar 8mo agoList of caveats I can think of: * Covers regular federal income tax only. Does not cover any of the taxes on Schedule 2, nor any state/local taxes. * Assumes both individuals take the federal standard deduction as Single (not Head of Household). * Assumes no other credits or deductions. As a result, this can potentially understate marriage penalties for dual-income couples with kids. https://taxpolicycenter.org/briefing-book/what-are-marriage-penalties-and-bonuses https://taxpolicycenter.org/briefing-book/what-are-marriage-...
- dmoy 8mo agoAlso assumes no income based repayment on debt
- robrtsql 8mo agoIt cost me over $3000 to be married on my 2024 taxes. I used to be able to declare my house, and my parents' house (I own it). Because of these two things, I have been able to itemize my deductions. In 2024, because I got married, the itemized 'threshold' to reach was higher so I had to take the standard deduction, which ended up costing me a lot more in taxes. It's making me ask questions like "is it worth $3000 every year forever to stay married?" Your mileage may vary!
- hellojesus 8mo agoI had the same conundrum. It costs me far more to be married than to not be married because of the itemized deduction loses. I used to be able to itemize about $21k. But now that I'm married, the standard $24k wins out, which means our household went from $33k deductions to $24k, and our effective rate ends up being about 30%, so that's about the $3k your are penalized. Plus state income taxes and county surcharges on income above $200k at 1%. It makes me terribly sad each and every year. And each and every year I have to reconsume stories about the man that flew his plane into an IRS building, and the guy from NJ that threatened an IRS agent on a voicemail and then called back immediately and apologized but still got 12 months. Every year I make a decision to not throw my life away. And every year it's a really tough decision.
- DoctorOW 8mo agoIf it helps you in talking yourself down from domestic terrorism, IRS is just law enforcement. Killing IRS agents won't lower your taxes, in the same way killing police officers won't legalize anything.
- hellojesus 8mo agoI agree. Which is why I have not yet performed a domestic terrorism. Usually I express my disgust by writing things like "domestic terrorist" in the job title box on my tax return. But I do give it serious thought, with the quandary normally being: do I have the capacity (and the willingness) to inflict such an impression that I can terrify people from choosing to work for the IRS?
- adeelk93 8mo agoIdk how you can have a tax calculator around marriage without considering that SALT caps are shared, and not doubled, when married
- hellojesus 8mo agoThis is a very good point. I pay more in state income taxes than the $10k cap, which means I don't get any real estate tax write offs. My now wife completely lost her $10k salt deduction after the marriage. I have hatred for life.
- dh2022 8mo agoThe biggest item on SALT is the real estate taxes and mortgage interest expense. A household has only one address - and thus it makes sense to have tax deduction for just one real estate/ mortgage interest expense. As such it makes sense to share the SALT cap - just like sharing the home. (also the fact that biggest beneficiaries of SALT are states either high housing costs and these states tend to be Democrat leaning states made it easy for Trump to cap the SALT deduction in his 2018 tax cuts)
- knowitnone3 8mo agonow what does it cost a man to be married and divorced - the house, half of everything, kids