If you tie the knot by 11:59 p.m. Dec. 31, you might be married for only one minute of that year. But that's all it takes, as far as the Internal Revenue Service is concerned. If you are married as of the end of the year, the IRS considers you to have been married for the entire year, at least for federal income tax purposes, and being married makes a big difference in your tax rate.
Married Filing Jointly
If you are married as of the last day of the year, you have the option of filing a joint return with your spouse. You get to combine your incomes and your deductions, even if only one of you has income. Tax rates for married couples who file a joint return range from 10 percent to 35 percent for the 2012 tax year. Taxable income of up to $17,400 is taxed at 10 percent. Amounts between $17,400 and $70,700 are taxed at 15 percent. Amounts between $70,700 and $142,700 are taxed at 25 percent. The tax rate increases to 28 percent on taxable income between $142,700 and $217,450. A 33 percent tax rate is applied to income between $217,450 and $388,350. Income in excess of $388,350 is taxed at the top rate of 35 percent.
Married Filing Separately
Filing a joint return usually provides a lower combined tax obligation, but that is not always the case. Even if it doesn't give you a lower tax bill, there might be other reasons to file separate returns. For example, if you want to be responsible only for your own tax liability, you and your spouse will both need to file separately. 2012 tax rates for married individuals filing separate returns also range from 10 to 35 percent, but the tax brackets are narrower. Taxable income of up to $8,700 is taxed at 10 percent. Amounts from $8,700 to $35,350 are taxed at 15 percent. The 25 percent tax rate applies to incomes from $35,350 to $71,350. Income between $71,350 and $108,725 is taxed at 28 percent. Amounts from $108,725 to $194,175 are taxed at 33 percent and any amount over $194,175 is taxed at 35 percent.
Only your taxable income is subject to federal income taxes. If you file a tax return, you get to exclude some income from your taxable income. For example, you can reduce your taxable income by claiming either the standard deduction -- $11,900 for joint returns; $5,950 for separate returns -- or you can itemize your deductions. You can further reduce your taxable income based on the number of exemptions you claim. If you file a joint return, you can claim yourself and your spouse, along with any dependents you have. If you file separately, you can claim yourself and your dependents. You might be able to reduce the amount of your taxable income if you contributed to a traditional IRA, had qualified moving expenses, paid student loan interest or qualify for some other deductions.
Just because your taxable income falls in the 25 percent range does not mean all of your income is taxed at 25 percent. The federal income tax system is based on a marginal rate, which means the income that falls into each bracket is taxed at its own rate. For example, if you are married, have taxable income of $120,000 and file a joint return, the tax on the first $17,400 is taxed at 10 percent, or $1,740. The tax on the amount between $17,400 and $70,700 is taxed at 15 percent, or $7,995. The remaining amount is taxed at 25 percent, or $12,325. The total federal income tax on the $120,000 would be $22,060 for an effective tax rate of 18.38 percent.
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