There's a yet another reason to stay single these days: a tax break. Lowering your taxes used to be one of the perks of getting married, it was one of the government's ways of pushing us to do something that was beneficial to society.
Historically the dynamic of couples has been such that one person earns far more than the other and therefore the amount they're taxed falls after they get married. But in today's modern dual-income households, tax bills can skyrocket after marriage, because couples' combined income puts them in a higher tax bracket than before.
So why doesn't the IRS incentivize getting married anymore?
Essentially couples can now reduce their taxes by twice as much of their mortgage and home interest on their tax returns due to a significant change in policy by the Internal Revenue Service (IRS) in August.
The IRS didn't play much of a role in this decision. It was forced to change its taxation rules by the courts, after a couple in California challenged its mortgage-deduction rules.
End the marriage penalty. Married couples pay 15% more taxes than people who live in sin. We have anti Christian gov and IRS.— Tom Orr (@TomOrr777) July 12, 2016
Some people (presumably married couples) were none too pleased by this new ruling.
What exactly does the new tax policy say? Break it down for me.
Basically, the law now says that taxpayers can deduct the interest they pay on up to $1 million in mortgage debt and $100,000 in home equity financing which means that a couple that's not married could each get up to $1.1 million deducted from their taxes, totaling a deduction of up to $2.2 million dollars, Bloomberg reported. A married couple, on the other hand, could only reduce their taxes collectively by $1.1 million.
Who does this new rule really have an impact on?
This new tax deduction will likely only really impact middle and upper-class couples (who are not married yet) who have a mortgage or plan on getting a mortgage. The ruling could perhaps also impact friend or family who want to buy real estate together.