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.

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