7 Ways Getting Married Can Increase Your Tax Bill, According to a CPA
There are a lot of benefits to getting married. You always have a binge-watch buddy and a plus-one for family events. Dividing up chores is easier. However, the bonds of matrimony can also come with their downsides (no, we’re not talking about in-laws): Your tax bill could actually increase.
Though it’s certainly not a guarantee — in many instances, marriage can help lower your taxes — it can happen. Just as you need to be prepared for your in-laws’ “suggestions” about everything, you should also be aware of how tying the knot can change your tax picture. MoneyLion talked to Daniel Roccanti, a CPA and real estate and construction advisor at James Moore & Co., to learn more. Here are seven ways getting married can increase your tax bill.
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1. High Earners May Run Into a 'Marriage Penalty'
Being a high-earning power couple sounds amazing — after all, Beyoncé and Jay-Z make it work — but Roccanti warns that if both you and your spouse are high earners, combining your income can push you into a higher tax bracket faster than if you were single.
“Certain credits and deductions phase out more quickly for married couples filing jointly,” he said.
While federal tax brackets are largely adjusted for married couples, some thresholds are not doubled — which can create what is often called the “marriage penalty.”
2. You May Encounter Net Investment Income Tax (NIIT) Thresholds
Roccanti also spots more potential trouble for high-earning lovebirds, adding that the 3.8% net investment income tax kicks in at $250,000 for married couples filing jointly — which, he says, isn’t double the single threshold.
“For real estate investors or individuals with large capital gains, that can mean additional tax exposure after marriage,” he said.
For reference, the NIIT threshold is $200,000 for single filers, meaning married couples don't receive a fully doubled threshold.
3. You Have To Contend With SALT Deduction Limitations
Pondering SALT deductions isn’t the most romantic activity — you’d likely rather plan your honeymoon. But Roccanti wants you to be aware that the $10,000 cap on state and local tax deductions applies per return, not per person. What does that mean for you and your spouse?
Roccanti is clear: “Two high-income individuals with significant property taxes or state taxes don’t get double the benefit once married.”
In other words, even if both spouses previously deducted up to $10,000 each while single, they're still capped at $10,000 total once they file a joint return.
4. You May Phase Out of Certain Credits and Deductions
Credits and deductions can help make your tax bill less burdensome. Unfortunately, Roccanti said that certain credits, such as education or child-related credits, as well as certain itemized deductions, can phase out at specific thresholds for married couples compared with two single filers.
“This can reduce benefits you may have previously qualified for,” he said.
5. Your Capital Gains Planning Could Change
Let’s say you’ve had success as an investor this year, racking up large investment gains. Sadly, your spouse hasn’t been so fortunate and has taken losses. This imbalance in fortune can complicate your tax planning, according to Roccanti.
When you marry, your gains and losses are combined on a joint return, which may change how effectively you can offset investment income.
Still, it isn’t the only concern your tax advisor might want to bring up.
“Additionally, home sale exclusions still cap at $500,000 for married couples — not $500,000 per person unless certain requirements are met,” Roccanti said.
Single filers can exclude up to $250,000 in gains. Married couples filing jointly can exclude up to $500,000 total — but only if at least one spouse meets the ownership test and both meet the use test. If those requirements aren’t satisfied, the exclusion may be reduced, potentially increasing your taxable gain.
6. You May Deal With Passive Loss Limitations
If either spouse is a real estate investor, Roccanti has another word of warning for you. “Rental losses are generally limited unless one spouse qualifies for Real Estate Professional Status (REPS),” he said. “Without proper planning, married couples can find their losses suspended instead of offsetting active income.”
Passive activity loss rules can limit the ability to deduct rental real estate losses against other types of income, and those limits apply differently depending on filing status and income level.
7. Trying To Avoid the Marriage Penalty by Filing Separately Can Backfire
If you’re worried about a potential marriage penalty, you might consider filing separately to keep incomes divided. But that strategy can create new tax headaches.
“In many cases, it actually eliminates eligibility for valuable deductions and credits,” Roccanti said.
For example, couples who file separately may lose access to education credits, student loan interest deductions and certain income-based benefits. In some cases, the combined tax bill ends up higher than if they had filed jointly. For many average-income couples, filing jointly is still the better choice.
The Bottom Line
Marriage can be truly wonderful — there’s a reason they call it happily ever after. Unfortunately, certain aspects of paying your taxes might get more complicated, and you could be dealing with a higher tax bill.
“Marriage doesn’t automatically increase your taxes — but it changes the rules," Roccanti said. "The key is understanding how income stacking, deduction limits and investment activity interact once you file jointly. With proactive planning, especially around real estate, entity structuring and timing of income, married couples can often turn what looks like a tax increase into a long-term strategy.”
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal, or tax advice.
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