President Biden is proposing ways to pay for a massive infrastructure plan. One of those proposals, raising taxes, could hurt married couples.
The White House promises not to raise taxes on Americans making less than $400,000 dollars a year. However, that number applies equally to individuals or married couples. So, financial experts say there's an incentive for two workers who make $400,000 combined not to file as a couple, because they would have to pay more taxes. Houston CPA Robert Fumagalli says some will hold off on marriage if that's the case.
“Years ago, there were stories about people that would go out and get divorced on December 31st so they could file single, then get remarried on January 2nd,” Fumagalli said.
He told KTRH he doesn’t expect to see a majority of couples making the same move if Biden’s tax policy is implemented, but he says Americans (in general) will try to find loopholes and incentives in any tax system.
“If you get forced into a situation like this, and you are being penalized terribly for being married, yes, I can see people taking this strategy. You do anything you can to save on taxes,” Fumagalli explained.
This comes at the same time recent census numbers show an uptick in unmarried coupling choosing to live together rather than tying the knot: up to 15 percent of couples between the ages of 25 and 34.