A couple pays a “marriage penalty” if the partners pay more income tax as a married couple than they would pay as unmarried individuals. Conversely, the couple receives a “marriage bonus” if the partners pay less income tax as a married couple than they would pay as unmarried individuals.
Under a progressive income tax, a couple’s income can be taxed more or less than that of two single individuals. A couple is not obliged to file a joint tax return, but their alternative—filing separate returns as a married couple—almost always results in higher tax liability.
How are married couples taxed in the UK?
The joint taxation of married couples appears to be a step back to the old days, but in fact joint taxation is new. Prior to 1989 the income of the wife was taxed on the husband, whereas any modern proposal would have to recognise that the couple were jointly responsible for making a return and paying the tax. So let’s start with the admin.
Is there anything to gain from joint taxation of married couples?
However, the tax system already recognises married couples and civil partners differently from unmarried but cohabiting couples, so there is no real reason why this should not be a further development of this principle. Is there anything to be gained from the joint taxation of married couples, if they wish for it?
What are the tax benefits of two income couples?
This is particularly beneficial in the case of a two-income couple where one spouse earns more than another. Under normal circumstances, the Revenue Commissioners will assume that you wish to be taxed under joint assessment, and will calculate your tax liability accordingly.
Why do some married couples file their taxes separately?
One of the most common reasons why some couples file separately is to limit their liability for the other spouse’s tax errors.
