The first year of married life can bring about many changes for the couple involved. One of the most unwelcome changes regards the marriage penalty. The marriage penalty is a tax-law inequity that forces millions of couples to pay more in taxes than they did when they filed singly. Married couples wind up paying more in taxes if their combined income is substantially more than when each spouse filed separately. This increased income brings couples up into a higher tax bracket; therefore they end up owing the federal government more in taxes.
The couples most likely to be hit with the marriage penalty are those that are compromised of two-income earners, especially when both spouses have similar incomes and/or are high-income earners. Basically speaking, when two people get married, the second person's income is essentially added on top of the first person's income, pushing these couples into a higher graduated tax bracket. At the new higher-income level, not only do these couples have to pay more to the IRS, they may also lose some itemized deductions and personal exemptions because of their new taxable income amount.
The marriage penalty does not affect all couples in the United States. Some even find that their joint tax bill is less being married than it was when they were single. However, this usually only happens to those couples in which one person has little or no income. As most couples are compromised of double-income earners now-a-days, it seems that more people are affected by this penalty than those who are not. In a small number of cases, couples can cut their tax bills by filing separately. Unfortunately, at this point there isn't much for a couple to do to save taxes except not get married in the first place or divorce in order to save the money. Although most do not choose to go to this extreme in order to spite the IRS, some have. Just in case you are thinking of divorcing for this purpose, be aware that you cannot divorce in December of one year and then remarry the next year. People who have tried it in the past have been snagged by the IRS and charged with penalties in addition to the extra taxes they would have had to pay had they stayed married.