From State tax, but that’s still not related to the federal deduction, where it only kicks in you itemize.
However while you may not be able to deduct your property taxes if you own a house with standard deduction, you do get to if you are a landlord regardless of standard deduction.
Point is a couple shares rent. A couple’s residence is unlikely to be twice the cost of a single residence, unless you have roommates. So 30k for a couple guess further than 15k living alone.
Exactly. It’s to incentivize one person to be a bread winner and one to make less and be a home maker (or something with less hours) so you get the tax benefits. It would be a nice system if expenses weren’t so damn high.
Married couples get the same tax benefits regardless. A raise for the lower earner always means more money for the family, so no, it doesn’t incentivize having a breadwinner over having equal pay.
Let’s do a quick exercise without real numbers. Please let me know if I’m wrong because this is what I thought. If I make 150k and am maxed out on my standard deduction, but then I make 250k and there’s no difference on my standard deduction, I’m not getting more standard deduction. If my wife is a stay at home mom and I make $250k, I am getting more standard deduction now, right?
This is how married taxes work, right? Am I wrong on that? We get different brackets and different rules. I’ve been marred for 7 years and my first year I got all my taxes back because she didn’t work that year. Am I wrong?
But what you’re saying: a raise for the lower earner does give more money. But by being a big earner marrying a now or low earner, it incentivizes high earners marrying low earners. Or mixed earners. It was devised in the time when women didnt work but we needed more tax benefits for taking care of women.
No. You’re correct. You would get less money back on your taxes if your wife’s income went up. However, the amount your taxes go up is less than the increase to your wife’s income, so you still end up ahead as a couple. You get the largest individual tax breaks when you have a breadwinner, but the total financial incentive (after tax returns) is for both partners to make as much money as possible.
That said, finances are very emotionally charged and how people should approach their finances depends on how they think about this stuff. That’s why snowball debt strategies work - not because they are optimal financially, but because they play into the psychology of a human paying off debt. With that in mind, I suppose you could still feel incentivized to have a large difference in incomes because of the tax breaks - it just isn’t financially optimal if there is a free opportunity for the lower earner to bring in more money.
Homemaker or not, marriage promotes economic stability because of tying folks outcomes together. As an edifice, the State likes that a spouse probably steps in before aid programs or whatever.
True, and perhaps credible for a married couple with a 31k deduction, but the 15k deduction for an individual might be a bit rough for single folks.
It’s complete bullshit. What city can you rent an apartment for 15k/year even with roommates?
Depends on what you define as a city. A quick search of a random city (Saginaw, MI), I see some 2 bedrooms for 985 a month.
Of course people from LA might not call that a city, but, to people from towns of 800 people, it is huge at about 44k people.
Some states allow you to deduct a portion of your property taxes, including renters (a set % of your rent). On top of the standard deduction.
From State tax, but that’s still not related to the federal deduction, where it only kicks in you itemize.
However while you may not be able to deduct your property taxes if you own a house with standard deduction, you do get to if you are a landlord regardless of standard deduction.
I’m very lucky, I rent half a house for under $10k a year in a city. But I also manage the property.
It doesn’t really make a difference if both parents are working and make similar amounts. Then that part is no different from filing separately.
Point is a couple shares rent. A couple’s residence is unlikely to be twice the cost of a single residence, unless you have roommates. So 30k for a couple guess further than 15k living alone.
Exactly. It’s to incentivize one person to be a bread winner and one to make less and be a home maker (or something with less hours) so you get the tax benefits. It would be a nice system if expenses weren’t so damn high.
Married couples get the same tax benefits regardless. A raise for the lower earner always means more money for the family, so no, it doesn’t incentivize having a breadwinner over having equal pay.
Hmmm…
Let’s do a quick exercise without real numbers. Please let me know if I’m wrong because this is what I thought. If I make 150k and am maxed out on my standard deduction, but then I make 250k and there’s no difference on my standard deduction, I’m not getting more standard deduction. If my wife is a stay at home mom and I make $250k, I am getting more standard deduction now, right?
This is how married taxes work, right? Am I wrong on that? We get different brackets and different rules. I’ve been marred for 7 years and my first year I got all my taxes back because she didn’t work that year. Am I wrong?
But what you’re saying: a raise for the lower earner does give more money. But by being a big earner marrying a now or low earner, it incentivizes high earners marrying low earners. Or mixed earners. It was devised in the time when women didnt work but we needed more tax benefits for taking care of women.
No. You’re correct. You would get less money back on your taxes if your wife’s income went up. However, the amount your taxes go up is less than the increase to your wife’s income, so you still end up ahead as a couple. You get the largest individual tax breaks when you have a breadwinner, but the total financial incentive (after tax returns) is for both partners to make as much money as possible.
That said, finances are very emotionally charged and how people should approach their finances depends on how they think about this stuff. That’s why snowball debt strategies work - not because they are optimal financially, but because they play into the psychology of a human paying off debt. With that in mind, I suppose you could still feel incentivized to have a large difference in incomes because of the tax breaks - it just isn’t financially optimal if there is a free opportunity for the lower earner to bring in more money.
Yeah, I don’t know any couples my age who don’t both work.
Homemaker or not, marriage promotes economic stability because of tying folks outcomes together. As an edifice, the State likes that a spouse probably steps in before aid programs or whatever.