This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Unlucky in Love, Punished by the IRS

BOSTON ( TheStreet) -- Marriage is discriminatory, with government-funded financial benefits that are unfair to singles.

Setting aside the national debate over same-sex unions, the above argument is increasingly touted by contrarians of all political persuasions. "Singlist" and "singlism" are among terms describing discrimination against the unvowed. The debate is also a hot topic in the U.K., where politicians are debating the merits of additional tax breaks for couples.

There are many ways singles are punished in the U.S. tax code -- and several ways married couples are punished as well.

To what degree should the government reward taxpayers on the basis of their amorous union? Do singles get the short end of the stick in matters of both love and money?

The U.S. Census (using 2009 statistics) puts the number of unmarried Americans, 18 and older, at nearly 97 million, roughly 43% of the population; 53% of the unmarried are women, 61% have never been married, 24% were divorced, 15% were widowed and 17% (16.2 million) are 65 and older.

The number of households maintained by unmarried men or women was tallied at 52.5 million, 45% of households nationwide; 31.7 million people lived alone, 9.9 million single mothers lived with children, as did 1.7 million single fathers.

A 2004 study by the federal government's General Accounting Office identified a total of 1,138 federal statutory provisions classified to the U.S. Code in which marital status is a factor in determining or getting benefits, rights and privileges. More than 60 provisions of the Internal Revenue Code specifically apply to married couples.

"For tax rewards as well as penalties, those who are married, single or living together are treated differently under the tax law," says Mark Luscombe, principal federal tax analyst for CCH, a Wolters Kluwer business and provider of tax information, software and services. "Furthermore, the tax implications of different marital decisions aren't always clear."

In the not-so-distant past, there was what was considered "the marriage penalty," in which couples filing their taxes jointly would be disheartened to discover that their combined incomes pushed them into a higher tax bracket.

There is also the inverse, the "marriage bonus," in which a high-salary earner's tax burden is reduced by having a spouse whose lower income (or no income at all) carves the tax burden downward. The end result is that the breadwinner's taxes can be markedly less filing jointly than as a single.

The tax code rewards those already lucky in love in other ways.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $124.43 -1.54%
FB $82.16 -1.20%
GOOG $548.00 -0.73%
TSLA $188.77 -0.94%
YHOO $44.44 -1.10%

Markets

DOW 17,776.12 -200.19 -1.11%
S&P 500 2,067.89 -18.35 -0.88%
NASDAQ 4,900.8850 -46.5560 -0.94%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs