Congress: Stop the Social Security "Marriage Penalty".
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Well It's about that time of the year many dread; Filling out, or having others fill out our income tax forms with the impending dread of owing something...or perhaps the unexpected fortune of having "overpaid" and expectant of a check. We go through the merry-go-rounds and roller-coasters year after year thinking we'll reach those "Golden Years"' that place where we have a collective sigh of relief, catch a breath, relax thinking taxes shouldn't be a torment...Only to find, for retired, working spouses, collecting pensions and Social Security, "marriage bliss" is attached with a steep tax penalty not placed on those who are single, "separated and not living together the entire year" and those who choose to cohabitate, divorced or simply have a "civil union". All of these sub-groups receive $25,000.00 each "base amount" of income exclusion which offsets how much of our Social Security Income is taxable (separate, cohabitating couples, divorced or separated couples receives $50,000.00 toward Social Security Income offset).
Married couples are forced to use a "base amount" of $32,000.00 vice $50,000.00. My first inclination was to file taxes as "Married filing separately" which would magically and mystically incorporate the $25,000.00 "base amount" and remedy this. It was not to be; Instead, "Married filing separately" meant using 85% of Social Security income as our "Basis" for taxation as the offset; The net result being the same; We still owed substantially more than our unmarried contemporaries simply because we were "married"...and simply because we experienced unexpected income this year it made our government the beneficiary/overall winner and recipient of a sizeable amount of our "windfall" due to the "Marriage Penalty". Had we been single, we would have paid a mere fraction of that amount.
"When it comes to taxing Social Security, the marriage penalty is very much alive and well. Older married couples having modest incomes and receiving Social Security benefits must pay tax on their benefits if their "base amount" is more than $32,000. (The "base amount" is the married couple's combined adjusted gross income, as reported on their tax return, plus interest from tax-exempt investments, plus 50% of their combined Social Security benefits.) In contrast, each partner in an unmarried couple pays taxes on Social Security benefits only if his or her "base amount" is more than $25,000. That would mean that, as a couple, their base amount could be as high as $50,000 before they had to pay taxes on Social Security benefits."
I have no qualms with just and equal taxation. We pay taxes our entire lives. It's tough enough paying taxes on Social Security deposits and then be taxed again on it. But this takes it to yet another level. I take issue with an inherent flaw in our tax law, which needs to be addressed and corrected; There is a sizeable and ever-growing number of U.S. citizens being unfairly treated as a subclass. This issue will become increasingly conspicuous and inflammatory as the second wave of married, dual-income, "baby-boomers" reach retirement age.
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