Marriage and Divorce

If you really want to maximize your tax situation, the law could even adjust your romantic decisions. Under current law, many two-income couples end up paying more in taxes by getting married. The law eliminates that marriage penalty for couples making less than a combined $600,000. So, if you’ve held off on getting hitched because of a tax hit, 2018 may be your wedding year. But be advised: Those individual tax-rate changes are set to end in 2026 — after that, your marriage might have to be just about love. The top earners should still be aware that marriage could be expensive at tax time. Add to tax bills for some couples is the cap on state and local tax deductions. It’s limited to $10,000 for married couples, even though two single people can deduct $10,000 each.

Tax considerations are even changing for those getting a divorce.Under the law, divorced taxpayers who pay alimony would no longer be able to deduct those payments from their income, and recipients of alimony would also no longer need to report the money as income. However, the provision doesn’t go into effect right away and instead applies to divorces finalized after Dec. 31, 2018. So, depending on whether you’re set to pay or receive alimony, you might want to speed up or slow down those divorce proceedings.