Pursuant to a congressional request, GAO provided information on certain
income tax code provisions that result in marriage penalties or marriage
bonuses, focusing on: (1) those income tax provisions that depend on
taxpayers' marital status for their applicability; and (2) the number of
taxpayers affected by marriage penalties or bonuses.
GAO found that: (1) there are 59 provisions in the income tax code where
tax liability depends at least partially on the taxpayer's marital
status; (2) the provisions on the tax rate, the standard deduction, and
the earned income credit are most commonly discussed in connection with
marriage penalties and bonuses; (3) nine provisions, such as those on
the tax rate and social security taxation, make some adjustment for the
differences between joint and single income, but adjustments for married
couples filing jointly are less than twice those allowed to single
taxpayers; (4) those tax provisions limiting capital losses and the home
mortgage interest deduction have only one limitation that applies
equally to married and single taxpayers; (5) nine other provisions, such
as those on the personal exemption, treat married couples as if they are
single individuals or provide couples with twice the benefit allowed a
single person; (6) 26 provisions treat a married couple as a unique,
indivisible unit for tax purposes; (7) 56 of the 59 tax provisions could
result in a marriage penalty or bonus depending on the taxpayer's
individual circumstances; (8) the single most important factor that
determines the provisions' effect on married couples is how income is
divided between spouses; (9) couples with disparate incomes generally
could enjoy a marriage bonus, while couples with equivalent incomes
generally incur a marriage penalty; (10) other factors affecting
couples' tax liability include which spouse owns property, has capital
gains or losses, and is qualified for tax deductions and credits; and
(11) the impact of marriage penalties and bonuses varies widely, both in
terms of the number of taxpayers affected and the dollar amounts
involved, but existing data is insufficient to quantify these numbers.
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