See How A New Marriage Tax Calculator Can Help You In Your Marriage

As written by Kelly Phillips of Forbes… Read on.

Years ago, I got an email from a good friend. It said simply:

I got married today.

I knew that she was seriously involved with someone and was planning a wedding but assumed I'd be wearing some kind of tacky bridesmaid dress instead of emailing back the question, "What inspired that?"

Her answer was short, "Health insurance."

My friend's employer, it turned out, offered coverage for her and her spouse, not for her and her boyfriend. That made a decision they had already been considering a lot easier. It turned out to be the right one: nearly two decades later, they are still married.

I'm guessing that health insurance isn't the basis for most marriages in America today. But despite what you see in the stores on Valentine's Day, the reality is that people may get married for reasons that have little to do with candles and roses. One of those reasons may have to do with money and more specifically, taxes.

The history of taxation and marriage is a complicated one. It used to be the case in the United States that one income equaled one tax return. This made sense in the pre-World War II era where families were typically single income. As that changed and we saw the rise of two-income families, a different approach was needed. In 1948, Congress adopted the joint tax return where income and deductions would be filed in the aggregate, resulting in a payment of tax roughly twice as much for a two-income family as a single-income family.

In the 1960s, more single women earned college degrees and went off to work. Single filers began objecting to what they believed was a "singles penalty" where a married couple received the equivalent of two single-person deductions even if there were not two incomes. This was unfair, claimed the singles, because married couples split expenses and did not deserve two full deductions and exemptions. Singles claimed that our tax system was, in effect, subsidizing marriage.

In 1969, Congress, responding to this charge, enacted an amended tax structure, which provided for a joint return for married persons with a scaled-down deduction equal to less than two single filers. This system, with some minor concessions in 1986, remained in place for more than thirty years.

In the late 1980s and 1990s, the family structure in the United States changed again as more couples opted to live together rather than get married; they even had a nickname: "DINKs" (Double Income No Kids). Some DINKs chose not to get hitched because of the so-called "marriage penalty" which made it more tax advantageous for single filers to live together than to get married. This was largely because single filers were able to retain a full personal exemption and standard deduction for each person, unlike married filers. The impact of the "phase out" which limits or eliminates certain deductions and credits was more dramatic for high-income married filers than it was for high-income single filers; married couples lost itemized deductions and personal exemptions more quickly. Capital losses and passive activity loss deductions were also less favorable for a married couple than for two single persons – in some instances, a married couple’s loss deductions could be equal to a single person’s loss.

In 2001, a new law allegedly offered relief for the "marriage penalty." Under the law, the standard deduction for married taxpayers who file jointly gradually increased to an amount equal to twice the standard deduction of persons filing a single return, resembling the 1948 bill that allowed two full deductions for married couples regardless of the level of income. This increase was phased in over five years beginning in 2005.

Today, the marriage penalty isn't as impactful for most couples as it once was: that doesn't mean that there aren't inequities in the tax code. While marriage typically results in a bit of a break for couples (especially in a household where only one spouse works or where income is widely different), there may still be a marriage penalty if both spouses work and earn similar incomes. Additionally, those pesky phaseouts may still apply, and some deductions, like the student loan interest deduction, are per tax return, not per person.

If you're curious how much more (or less) you'd pay by getting married, you can check out the Tax Policy Center's new marriage bonus and penalty tax calculator. The new calculator factors in the number of children and deductible expenses (in case you're one of the roughly one-third of taxpayers who itemize).