Marriage Penalty Relief
The "marriage penalty" is so-called because sometimes married taxpayers who both work, frequently have to pa higher taxes solely by reason of their marriage, when compared to taxes they would have paid if they remained single. The legislation eases this problem by 1) eliminating the penalty in the standard deduction, and 2) phasing out the penalty in the 15% bracket.
Specifically, the legislation gradually increases the standard deduction for taxpayers filing jointly to an amount equal to twice the deduction for single taxpayers. The phase-in schedule for the increase in the standard deduction for married couples is:
- 174% of that for singles in 2005
- 184% in 2006
- 187% in 2007
- 190% in 2008
- 200% in 2009 and later
The legislation expands the high-end of the 15% tax bracket to an amount equal to twice that of single taxpayers over the 2006-2008 period. The phase-in schedule is:
- 180% of that for singles in 2005
- 187% in 2006
- 193% in 2007
- 200% in 2008 and later
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- This article is excerpted from the CPA Bulletin that is prepared monthly by the staff of the AICPA for the clients of its members. This article does not have any official authority and the information therein should not be acted upon without professional advice. Copyright ã 2002, 2003, American Institute of Certified Public Accountants, Inc., Harborside Financial Center, 201 Plaza Three, Jersey City, NJ 07311-3881
- ã 2003 David J. Driscoll & Company