Itemized deduction limitations hit married couples harder.
During the first decade of the 21st century, Congress made significant progress on eliminating the "marriage penalty," which led to some married couples paying higher taxes than two single people with the same combined income. However, some marriage penalties remain in the tax code. Two major ones are contained in the Pease Limitation and the Alternative Minimum Tax, both of which limit itemized deductions.
Marriage and the Pease Limitation
One of the many features of the American Taxpayer Relief Act passed in the beginning of 2013 was the return of the Pease Limitation. This provision, named for its original proponent, Congressman Donald Pease, begins to phase out some itemized deductions for taxpayers with high incomes. In the 2013 tax year, the limitation starts at $250,000 for single filers and $300,000 for married filers. Because the limitation for married filers is not twice that of single filers, higher-income married couple that itemize will end up paying more taxes than two single people with a comparable total income.
Marriage and AMT
The Alternative Minimum Tax is a second income
tax system that trades most itemized deductions for a single large AMT exemption and a different tax rate. Like the Pease Limitation, the AMT also has a built-in marriage penalty. While single people get an AMT exemption of $51,900, a married couple filing jointly receives just $80,800. This means that married couples are more likely to have their deductions canceled by falling into the AMT than single people. Since married couples are also more likely to have children and own a house on which they pay property taxes, the AMT might be said to represent a double marriage penalty for some taxpayers.
Married and Filing Separately
Married couples who file separately typically get half the benefits of married couples who file jointly. In other words, if you file separately, you won't get to claim the single exemption for the AMT. You'll have to claim one half of the married couple exemption and you will also have to file with the same type of deductions as your spouse. The IRS won't let one of you take all of the itemized deductions while the other one files for the standard deduction.
Single-Income Married Couples