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How Marriage can Cost You in Taxes

The Patient Protection and Affordable Care Act can be a helpful way to get the money that you need for health care and other needs, but tax professionals have recently been looking further and further into whether or not it has serious insurance implications. According to Fox Business, 400 tax professionals examined the legislation behind the act at a recent seminar.

While learning the ins and outs of the act, these professionals discovered that the Patient Protection and Affordable Care Act may have added costs for those that are married. The new 0.9% Medicare surtax that has been implemented uses a $200,000 income limit for unmarried Americans. However, for those that are married, the Act has a $250,000 limit. That means that dual income households could be negatively affected by the Act.

Essentially, the surtax only applies to W-2’s and other earned incomes. A couple that is living together but has not legally tied the knot can get away with earning more money but still being protected under the act. But has soon as the cohabiting couple makes it official, if they are earning over $250,000 in dual income, then they are taxed more. These couples could end up losing thousands of dollars to taxes, simply for saying “I do.” An anti-investment that is a part of the plan could also harm married Americans.

According to the Fox Business report, the 3.8 percent anti-investment tax only applies to interest, dividends, and smaller incomes. This means that the tax won’t affect earnings, but it will affect savings. Singles who are subject to the tax will only need to pay out a few hundred dollars, but married couples can be taxed thousands. In some cases, it may be a better idea to spend those savings then let them lie in account where the interest is usurped by high taxes.

Realistically, the Patient Protection and Affordable Care Act is more convenient for the unmarried. Those that live together can calculate their credit individually, minimizing taxes. Those that sign a marriage license will end up with thousands of dollars in taxes to pay. Calculate the costs of marriage as you consider whether or not to marry your sweetheart.