Marriage – tax advantage?  Maybe yes, maybe no.

Marriage can have a tax-rate advantage, but it depends on the incomes.  Did you know you can actually save tax money if one spouse is making a lot less than the other?  It’s true.  The tax bill of the high-income earner can almost (if not totally) be cancelled out. 

The marriage penalty increases when both spouses are high-income earners, however, the marriage penalty rate has been decreased compared to the 80’s when couples would actually get divorced to avoid the taxes.

Marriage Tax Shelter?

If you are a high-income earner, and your future spouse starts their own business, if they operate at a loss, once married, your taxable income may (or will) be adjusted to offset the operating costs/loss of your spouse’s business.

Is there such as thing as a death tax advantage?

There are federal estate and gift tax rules that give special advantages to married couples. You can plan your estate so that estate taxes are deferred until both spouses have died.  That will ensure the surviving spouse is protected from estate taxes.

Source: The Bradford Tax Institute, Tax Reduction Letter, August 2013