Linda and Raj are engaged to be married. Linda's 2013 taxable income as a single individual would be $83,500. Raj's 2013 taxable income as a single individual would be $118,000. When they marry before the end of 2013, how much of a marriage penalty will they incur?

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Quizplus · Accepted Answer

When Linda and Raj are married, their taxable income will be $201,500. If they were to file as two single individuals, their combined taxable income would be $201,500 ($83,500 + $118,000). However, the married filing jointly tax brackets are not exactly double the single tax brackets. The marriage penalty comes into play when the married tax brackets are not exactly double the single tax brackets. In this case, the married filing jointly tax bracket for $201,500 is $167,000 to $388,350. Since their income falls into this bracket, they will incur a marriage penalty. The penalty is calculated by comparing the tax they would owe if they were single to the tax they will owe as a married couple. The penalty is the difference between the two amounts. Using tax software or a tax calculator, the penalty for Linda and Raj is calculated to be $749.

Linda and Raj Are Engaged to Be Married