To the average person who is cynical about marriage, there are plenty of reasons not to tie the knot. Of course there is the work that goes into a marriage, the sense of putting another person above your own needs, and then there is sharing a life (and space in a home) together. While these are the tenets of marital bliss for some, others see them as deal-breaking impediments.
As if cynics didn’t need another reason to doubt or discourage marriage, a recent accountingtoday.com report just pointed out one; courtesy of the IRS.
In most cases, marriage will be helpful to a high wage earner since a lower wage earning spouse will allow for more tax benefits given the increasing number of exemptions. However, with two high wage earning spouses, this may not be the case; especially considering the use of the mortgage interest deductions.
Unmarried couples may deduct twice as much as their married counterparts, according to a recent change in the IRS’ deduction rules. The change comes on the heels of a decision from the U.S. Court of Appeals for the Ninth Circuit which found that domestic partners may each deduct interest on up to $1.1 million in mortgage debt plus $100,000 in home equity debt according to California’s mortgage deduction rules. With that, unmarried couples who jointly own property will basically be allowed to deduct interest on property worth $2.2 million
This increased level may not apply to married couples who jointly own property. Nevertheless, there may be other ways to level the playing field for those who say “I do.” An experienced tax attorney may know the way.