Another Marriage Penalty for Taxpayers
A new reason to stick to cohabitation -- if you and your devoted have a giant mortgage.


Getting married may make your mom happy, but if you are a high-income couple, there’s a good chance your taxes will go up. That’s because your combined income could force you to pay a higher federal tax bill than you would have owed had you stayed single.
Now there may be another reason to break your mother’s heart. Thanks to a change in IRS rules last year, an unmarried couple can deduct twice as much of their mortgage- and home-equity-debt interest.
After losing a court case, the IRS agreed that the limits on deductions for mortgage interest—$1 million of mortgage debt plus $100,000 in home-equity financing—apply on a per-taxpayer basis, not a per-residence basis. A married couple is considered one taxpayer; an unmarried couple, two. That means an unmarried couple could deduct interest on a combined $2.2 million of mortgage debt.

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Block joined Kiplinger in June 2012 from USA Today, where she was a reporter and personal finance columnist for more than 15 years. Prior to that, she worked for the Akron Beacon-Journal and Dow Jones Newswires. In 1993, she was a Knight-Bagehot fellow in economics and business journalism at the Columbia University Graduate School of Journalism. She has a BA in communications from Bethany College in Bethany, W.Va.
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