Last week, everyone (except perhaps the residents of North Sentinel Island) learned that Travis Kelce had taken a knee to propose to Taylor Swift. When Swift announced their engagement, fans celebrated — it felt like the classic fairy-tale moment when the high school quarterback marries the homecoming queen. For many, it was a reminder of a simpler, more wholesome time thought to have been lost in today’s tribalistic era. Like many others, I wish them well, hope they have lots of children, and that they set an example for modern marriages.
The U.S. Treasury also wishes them well because their marriage could mean a yellow flag from the IRS, thanks to the marriage penalty.
The “marriage penalty” occurs when a married couple pays more in income taxes than they would have if each spouse had filed as single.
This penalty typically affects high-income couples. For 2025, the top federal tax rate remains 37% for individual filers with incomes over $626,350. But for married couples filing jointly, the 37% threshold isn’t doubled to $1,252,700. Instead, it kicks in at $751,600.
The same applies to capital gains. The top long-term capital gains tax rate of 20% applies once a single taxpayer’s income exceeds $518,901. But for married couples filing jointly, the 20% rate applies once their combined income exceeds $583,751 — not $1,037,802, which would be the doubled threshold.
Another way the marriage penalty can appear is through lost deductions. For example, the student loan interest deduction begins to phase out once income exceeds $85,000. A single filer earning $65,000 qualifies. But if that person marries and the couple’s joint income exceeds $200,000, the deduction disappears.
The state and local tax (SALT) deduction works similarly. While the One Big Beautiful Bill Act raised the deduction cap to $40,000 from $10,000, it did not double the cap for married couples filing jointly. If each spouse filed separately as single, each could claim the full $40,000.
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That said, the marriage penalty is usually not that high. For example, suppose a couple earns $1.4 million, with each spouse earning $700,000. Filing separately as singles, each would owe $216,020 in federal income taxes — for a total of $432,040. Filing jointly, however, their tax bill would be $442,062. That’s a $10,022 difference — or a 2.3% increase.
Because tax law is complex, especially for high earners, the actual penalty could be higher or lower than in this simplified example. With September already here, couples might consider consulting a tax professional to estimate whether they’ll face a marriage penalty by year’s end.
For couples considering marriage, one option to avoid the penalty is to register as domestic partners (RDPs) in states that allow it. The IRS requires RDPs to file as single or head of household, though they must file as married (either jointly or separately) at the state level. This often means filing two federal returns as single while also filing one or two state returns — hardly a simple solution.
Others may choose to cohabitate without marrying — not solely for tax reasons. The most famous example is Kurt Russell and Goldie Hawn, who have lived together since 1983 without marrying. While the IRS generally respects filing status, it has occasionally challenged long-term arrangements.
A notable case was Boyter v. Commissioner. A Maryland couple obtained quick foreign divorces in Haiti and the Dominican Republic at the end of tax years 1975 and 1976, solely to file as unmarried individuals and reduce their tax liability. They remarried soon after. The IRS argued the divorces were invalid under Maryland law and, alternatively, that they were shams not to be recognized for federal tax purposes.
Will the marriage penalty ever be eliminated? Probably not. Most people marry for love, not tax benefits, and only a relatively small group of taxpayers is affected.
The marriage penalty doesn’t just apply to wealthy power couples. With careful planning, many couples can either avoid it or at least soften the blow — and the money saved might even cover an anniversary gift.
Steven Chung is a tax attorney in Los Angeles, California. He helps people with basic tax planning and resolve tax disputes. He is also sympathetic to people with large student loans. He can be reached via email at [email protected]. Or you can connect with him on Twitter (@stevenchung) and connect with him on LinkedIn.