Singles and Taxes: Singles Need Tax Cuts, Too

Ah, spring. The season when worker bees begin to buzz about itemizing, everything is coming up the color of Benjamin Franklins, and those old bears in Washington get their paws on the national honey pot. On the anniversary of our country's most dreaded day, April 15, otherwise known as Bloodsuckers Day, Pocket Drainage Day, or, in some corners, Tax Day, President Obama vowed to simplify the tax code, reverse George Wallet Bush's tax cuts for the wealthy, and re-line the pained pockets of working stiffs with something jinglier than campaign slogans.

On the whole, I approve of what our president has done with his newfound power. I haven't agreed with every single one of his decisions, but I have supported many of them. Besides, what I like most about Obama is that he puts his money where his mouth is. From day one in office, he has wasted no time trying to make good on his promises, tackling the issues that past presidents wouldn't touch and refusing to back down in the face of partisan interests. The Wall Street bail-outs may have sparked questions about his populism, but does anyone honestly believe good ol' boy McCain wouldn't have doled out double the financial aid? Obama, on the other hand, continues to do far more for the average taxpayer than the previous Republican administration ever did, passing the Making Work Pay Tax Credit, the American Opportunity Tax Credit, the Federal Additional Compensation Program, the Cobra Health Insurance Stimulus, and many other acts, orders, and memorandums that benefit the labor force.

However, as much as Obama has championed the marginalized--the poor, the disabled, the women and children, the ethnic minorities, the nontraditional partnerships--he has yet to elevate this nation's largest "minority," singles, to equal footing with all other American citizens guaranteed life, liberty, and the pursuit of happiness. Since Obama is an advocate of the underdog, I doubt this is an intentional oversight. Most likely the president suffers from the same singlist delusions that cloud the minds of Americans from the moment they learn that all fairy tales end with "they lived happily ever after."

As singles, we have a duty to ourselves and future unmarried generations to uncloud his mind, don't you think? I propose that we write to President Obama and remind him that his intended tax overhaul should provide relief for singles, too. That we have paid through our noses to bankroll marrieds for too many years. That we are a large and powerful voting segment that has been ignored for too long. That we aren't a threat to American values but those who would see them fulfilled in the lives of all Americans.

This is a copy of the letter I plan to send to the president:


Dear President Obama:

Over the past three months, I have been impressed by the actions you have taken to help make the American Dream accessible to the average citizen. I applaud your initiatives to ensure that everyone who contributes to our great society is entitled to a roof overhead, food on the table, health care, an education, a clean environment, and a government that is accountable to the governed. Due to your efforts, the workplace is becoming a more hospitable environment for those on whose backs it is built--the workers. Now you have vowed to restore more power to the people by providing us with tax relief while tightening the belt on an upper class that has exploited us for too long.

While these plans are commendable, I have one concern. Though you champion justice and equality for all, there is a very large "minority" that is consistently excluded from its piece of the American pie--unmarried adults. At any given time, singles comprise approximately 50% of the U.S. population. In fact, the average adult will spend more of his or her life single than married. Despite these facts, singles are subject to many legalized forms of discrimination. It has been estimated that those who marry are entitled to over a thousand federal rights and benefits. What is seldom mentioned is that these rights and benefits come at the expense of single individuals, who must bankroll them. To make matters worse, singles are denied the basic protections against discrimination that are afforded to all other minorities.

This compounded inequity disadvantages singles at every turn. For instance, a single, childless man cannot give his Social Security benefits to anyone even when he has paid as much into the system as a married man who leaves his benefits to his wife...and...if he is not hired or promoted because an employer prefers a "family man," he has no legal recourse. A single mother cannot leave her house to her only, single daughter without an expensive will and heavy taxation...and...if her single daughter applies to rent a house, there is nothing to stop the landlord from choosing a married couple because he assumes they are more "stable." If a single woman is seriously injured, no one is allowed medical leave to care for her...and...she cannot get insurance because her single brother's family plan can refuse to add any adult other than a spouse.

Perhaps the most grievous injustice perpetuated against singles is written into our income tax code, which specifies that a single individual in any bracket is taxed at a higher rate than his or her married counterpart. For example, a single taxpayer who earned $60,000 in 2008 is taxed at 25%, but a married couple filing jointly who earned $60,000 combined owes only 15%. Over a 30-year career, the couple would amass $157,500 more than the single worker. That is grossly unfair! Single parents stand to lose the most since the Child Tax Credit phases out at a much lower level of income for them than it does for married couples. Our tax code also penalizes singles more heavily than marrieds when selling property, willing or inheriting an estate, or providing health care to anyone other than a spouse.

It is clear that any truly egalitarian revision of tax legislation must take into account that a rapidly growing constituency of citizens--about half the U.S. population--are denied their rightful earnings simply because they did not have the good fortune to find suitable marriage partners. If these individuals were, say, Hispanic or Muslim or women or wheelchair-bound, it would be unconscionable to demand more taxes from them, yet it is somehow acceptable because they are not married. To add insult to injury, singles, especially women, parents, and people of color, are already far more likely to live in poverty. Without the reinforcement of a second income, they need help, not further deprivation.

Going it alone is not easy. Singles contend with tremendous social pressure to marry, the financial hardship of stretching one income in an economy designed for two, and the personal fallout of loneliness and lack of support. Still, there are many reasons why they do not marry. Many would like to but are not able to find appropriate partners. Some have familial obligations or physical conditions that prevent it. Others are dedicated to work, education, or volunteer causes. Still others, aware that nearly 50% of marriages end in divorce, wisely recognize that they are not ready or able to make the kinds of sacrifices necessary for a successful long-term relationship. And, of course, many singles have previously been married but are now divorced due to abuse, infidelity, addictions, or other chronic problems that made their relationships unhealthy.

Research shows that happy marital relationships benefit couples, and if the government wants to encourage marriage, it should do so by funding pre-marital and marital counseling as well as relationship skills education in the schools. But it is wrong to treat people who cannot or choose not to marry as second-class citizens who must bear additional financial burdens because of their "failure" while rewarding those who do with all kinds of incentives which are not even proven to influence marital choices, much less ensure that those choices are careful, healthy, or lasting.

The family unit is an important building block of society, and tax deductions and other aid should certainly be provided for minor children, who rely on parental support. But in a nation in which everyone over 18 assumes the rights and responsibilities of an American citizen, there is no reason why anyone should be given a tax break to support another able-bodied adult. If a childless couple can afford for the wife or husband to stay home and take care of the house on one income, that is their decision, but single taxpayers should not have to part with more of their hard-earned cash to supply them this luxury. Higher tax rates for singles are especially unjustifiable when one considers that a couple with two incomes can split many of the costs of living while singles have only themselves to rely on. The "singles penalty" has the effect of kicking people who are already down.

I know that the subject of discrimination is close to your heart. As you reform the nation's unwieldy tax code, please remember that it is never morally acceptable to discriminate against anyone--not by race, nationality, religion, age, gender, sexual orientation, or marital status. The solution to this inequity is to stop treating single workers as though they are less valuable or less entitled to their share of the American Dream. We must eliminate marital status as a determinant of tax bracket. Everyone who earns a specified amount should be taxed at the same rate, single or married. If someone chooses to support another able-bodied adult on his or her income, that should be a private choice, not one that the unmarried public has to fund. Also, we must eliminate marital status as a determinant of the Child Tax Credit. Everyone who earns a specified income should be eligible for the same amount of credit per child. We should not privilege the children of married couples over the children of single parents. Further, we must lift taxes on health insurance benefits for unmarried recipients. Every childless individual, single or married, should be entitled to the same untaxed health benefit, to be used for whomever he or she sees fit. Finally, we must end the tax distinction between singles and marrieds for purposes of selling, willing, and inheriting property. All taxpayers, single or married, should be allowed the same tax exclusions on home sales. All taxpayers, single or married, should be able to leave an estate to one other individual without incurring a tax penalty. All taxpayers, single or married, should be exempt from property tax increases on a home they have inherited.

Please help us abolish the last form of legalized discrimination, recently coined as singlism, starting with revisions to a tax code that unfairly favors one half of Americans over the other. One of today's most hotly debated topics is that of same-sex marriage. But nontraditional families are not just same-sex or unmarried couples. We are single parents raising our children.We are brothers and sisters or lifelong friends sharing our homes. We are adult children living with parents or grandparents. And, yes, some of us live alone. It is high time we are all entrusted with the same rewards and responsibilities, no matter who we love or who we live with. Please be the first president to help us truly live up to our proclamation of liberty and justice for all.

Sincerely,
[Name]


Anyone who wants to personalize the above letter is free to do so. Please edit it however you wish, leave it as it is, or use it to inspire a completely original letter and send it to President Obama. Then pass it on to your single friends and family (or anyone you know who cares about civil rights) and ask them to do the same. I encourage everyone who is single to unite against marital status discrimination and stand up for our right to fair taxation.


Do you think married couples are unfairly privileged over singles in the U.S. tax code? If you are single, has tax discrimination impacted your standard of living as opposed to that of the married couples you know? How do you think we could reform the tax code to make it more equitable? Can you think of other forms of economic discrimination that singles face?


Fun Link of the Day


Do you have a question for Clever Elsie about some aspect of the single life? Have a rant or rave about singlehood? Write in, and you just might see your question in a Singletude Q&A or your rant or rave in a Singletude Sound-off!

Tax Tips for Single Filers, Part II

In Tax Tips for Single Filers, Part I, we covered some winning strategies for single filers when taking exemptions and deductions. Today, the series continues with more tips to ensure the IRS takes a nibble instead of a chunk out of your income.



4. Invest wisely.

As a single, you are a one-income family. Unless you marry, you won't be able to rely on someone else's pension or Social Security. So it's imperative that you prepare yourself for retirement now. That means investing wisely, part of which is keeping as much of your investment as possible in your pocket and out of the government's. Here are some things you need to know about reducing the tax burden on your investments:


A. Stocks, Bonds, & CDs

This may seem like a page out of Investment for Dummies, but some people get complacent while their securities are plumping up every year at no charge to themselves. When it's time to dig into the cash cow, they forget that that money is going to be added to their annual income for tax purposes. That means if they're teetering on the brink of a higher tax bracket, that cash-out could propel them over the edge. Furthermore, if you want to profit from lower tax rates on long-term capital gains, you must hold an investment for at least a year, beginning the day after you buy it.

If your company has given you restricted stock, you have the option to pay tax on it within 30 days by making the 83(b) election or hold off until it becomes transferable, in which case, if the stock has appreciated, your taxes will be substantially higher. The 83(b) election can be a gamble if the stock does not appreciate, but if you have a reasonable expectation that it will, paying now and reaping the benefits later just makes sense. Restricted stock benefits are usually executive territory, but it never hurts to be prepared. :)

Or maybe bonds are more your style, but you bought them at a premium. If so, you can amortize the premium, which means you can deduct it from the taxable interest the bond generates. Be careful, though, as you travel through the labyrinth of laws on amortization lest you lose the path to a deduction.

Now a word about dividends: If you're interested in buying shares in a company that pays dividends, timing is everything. Every time the company announces that it will pay out a dividend (often quarterly), it sets a date called the ex-dividend date. If you purchase shares on or after this date, you will not get the dividend for that quarter, and you will pay a lower price per share because of it. However, if you buy before the ex-date, you will pay more and get the dividend...and then have to pay taxes on it. This wouldn't be so bad except that after the dividend is paid out, the value of the security falls by the amount of the dividend. The result is that you get nothing more than what you put into it, and you get taxed on it. And perhaps feel a little foolish.

This is a particularly effective way to screw yourself if you're buying the dividends as part of a mutual fund at its year-end payout, when the stocks have been appreciating all year. In this scenario, the long-term shareholders make out good, while someone who buys in just before the dividend pays taxes on an appreciation they never saw. If your brain looks like an egg on drugs after reading that like mine does after writing it, see this page for a better explanation.

Oh, and another page out of Investment for Dummies, The Collector's Edition: If you earn dividends from stocks, bonds, or CDs, you will pay taxes on those dividends even if they get rolled over or reinvested and you never see a penny. I've overlooked this leetle fact once or twice myself, so it can even happen to clever people. ;)


B. 401(k)'s

Be aware of the differences between a traditional 401(k) and a Roth 401(k). The former allows you to contribute tax-free, but this is deceptive since you'll be taxed when you withdraw the money, probably at a higher rate than when you deposited it. The latter doesn't give you a break upfront, but you can withdraw at retirement without taxation. For young singles who don't bring home a hefty paycheck now but might by retirement, the Roth 401(k) is the better deal.

If you're quitting a job with an outstanding 401(k) loan, pay it off before you go and not just so your boss will give you a good reference. If you don't, for legal purposes it will be as though you simply withdrew the cash, and that means you'll get hit with all the relevant taxes and, if you're under 55, a 10% penalty.

In a breakthrough for singles, anyone who inherits a 401(k) from someone other than a spouse can now roll it over into an IRA. That means you can pay tax on the inheritance over the course of a lifetime instead of in one lump sum! (This is a perfect example, by the way, of how the reality of changing demographics can trickle down to the Senate floor.)


C. IRAs

For singles of this generation, who face a bankrupt social security system, the phaseout of pensions, and unstable 401(k)'s, an Individual Retirement Account (IRA) is your best shot at building a nest egg. When it comes to taxes, traditional IRAs and Roth IRAs work like the 401(k) accounts described in B., so again, the Roth is recommended for younger singles with as-yet-unfulfilled earning potential. Plus, you can deduct up to 50% of the first $2,000 you deposit, which just might be the biggest deduction you take off anything, ever. :)


D. Annuities

An annuity is a bit like an IRA or 401(k) underwritten by an insurance company and is an especially good idea for singles who don't have an employer-matched retirement savings account at work. One of the best features of an annuity is that retirees can deduct the money they paid into it once the annuity pays out.



5. Go with a pro.

To play the stock market, you have to know the rules, and most of us don't have time to read the rule book. That's why you can deduct investment management fees for brokers, trustees, or other individuals who fit the bill. (What is and is not tax-exempt here gets complicated, so read this before you deduct willy-nilly.)

When tax time rolls around, unless your finances are very straightforward (think 1040EZ), swing for a professional accountant instead of using TurboTax or a tax preparation service like H&R Block. A CPA can help you find your way through loopholes that faceless tax prep firms might be unaware of or, worse, might be too careless to investigate for you. In addition, a certified accountant can advise you on long-term financial planning strategies. Don't worry. You can deduct his fee next year!



Can you think of any other tax breaks for investments or for the use of professional advisers? Do you know of any tax tips for single filers not mentioned in Part I or Part II of this series?


Fun Link of the Day

Tax Tips for Single Filers, Part I

Yesterday, Singletude outlined five ways in which singles get the short end of the tax rebate carrot. But enough of the negativity. The question is: What can we do about it?

Short of writing your senator and taking up the torch for tax reform, there's not much you can do to ensure that you get as big a slice of the tax return pie as a married couple. This really is a case of two against one. But you can be a savvy filer who knows his or her way around the tax code and takes advantage of every deduction open to you. Here are some opportunities to make your deductions stretch, three today and two tomorrow:



1. File as a head of household if you can.

The difference between a single filer and a head of household is that the latter has paid more than 50% of the cost of his or her home maintenance and has supported at least one dependent for over half the year. Heads of household are entitled to higher deductions and lower tax rates than those who file single, so it pays to find out if you meet the qualifications.


2. Take as many exemptions on your W-4 as you can.

If you're single and have no kids, claim one exemption for yourself. If you claim zero, you'll get a windfall in the spring, but that's because you let the government borrow your money for a whole year interest-free. You don't really want to fund some morally bankrupt politician's very own night with "Kristen," do you?


3. Deduct, deduct, deduct!

Yes, it's a pain in the brain to do the math; but no pain, no gain in the bank account. Here's what you should deduct:


Educational Expenses

Now here's one that affects millions of singles. If you're paying off student loans, you can deduct all or part of the interest if you earned less than $70,000, even if your parents helped you out with the payments.

Or maybe you took college courses this year. If so, you could be eligible for the Hope Scholarship or Lifetime Learning Credit. The first is for students in their first two years of college and provides for a deduction of up to $1,650 if your income was less than $57,000. The second applies to all other students, including graduate and returning students, and allows for up to $2,000 in deductions with similar income restrictions. If your income disqualifies you from either of these, you can take a tuition deduction of up to $4,000 if you earned less than $60,000 and up to $2,000 if you earned less than $80,000.

Finally, if you're not a student but a teacher, you're entitled to claim up to $250 of your out-of-pocket expenses for your classroom.


Medical and Dental Expenses

Obviously, you'll want to claim any medical bills you paid out of pocket, but you can also claim the long, dusty miles you drove to visit your favorite doctor. Check out the IRS's standard mileage rates for 2007 to calculate your deductions.

You can also get a break on purchases prescribed by a physician, and I'm not just talking contacts and Miracle-Ear, although medical devices and equipment are included. If your doctor advised you to start a weight-loss program or get an air purifier, that's a deduction.

In addition, you can deduct your health insurance premium if you purchased your own plan or contributed to it with taxable income (that is, if you weren't covered by an employer who deducted any required contributions directly from your salary).

Sound too good to be true for a country in health care crisis? There's a catch. For this deduction to work, your total expenses must be 7.5% or more of your adjusted gross income (AGI). (Note: AGI is tough to calculate, so sit this one out and let the professionals go to work.) However, if you're self-employed, there's a sweet spot for you--you can deduct your insurance premium, no matter how much you made.


Job-related Expenses

Falling under the category of Miscellaneous Deductions, these must amount to more than 2% of your AGI when added to your other miscellaneous items. They're tricky, ambiguous deductions and should be verified with an accountant when in doubt. For instance, you can deduct the purchase and upkeep of a company uniform but not of street clothes worn to work. You can deduct miles traveled to a job interview, but if you're hired, you can't deduct the same trip as a daily commute. Here's a general rundown of what you can deduct:

--Job-seeking expenses, including mileage costs
--Tools used on the job
--A computer or cell phone if your employer requires you to use it for business
--Specialized clothing or uniforms that you only wear to work
--Union dues
--Subscriptions to professional journals
--Continuing education in your field

Again, there's a lot of room for interpretation and, thus, a lot of room for error, so be careful. For more detailed info on the above deductions, go here.


Self-employment

It's said that with freedom comes responsibility, and this is true for no one as much as the self-employed filer. The deductions available to an independent contractor could be a post unto themselves and are beyond the scope of this blog. There are stringent regulations regarding the separation of personal and business use of rented spaces, equipment, transportation, etc. If you're self-employed or thinking of becoming self-employed, you can read an overview here and here.


Relocation

If you've relocated for a job (not just because you didn't care for it in sunny Michigan anymore), you can take deductions on expenses your employer didn't reimburse if your new office is 50 miles further from your home than your last place of business. Moving expenses are a bit of a gray area, but you can usually deduct:

--Travel for yourself and any dependents accompanying you, including pets
--Accommodations en route
--Shipping
--Storage of shipped items for a limited time

For fuller descriptions of these deductions, read this.


Hobbies

Guess what? If you perform as a sword swallower at circus sideshows on the weekend or sell your postmodern trashcan sculptures at the flea market, this counts as a hobby, and you can deduct associated expenses. The catch? You have to actually make money off the hobby (no, writing in your journal doesn't count), and you can't deduct more than you earned.


Charitable Contributions

If you have a soft heart for PETA or the Red Cross, make sure Uncle Sam doesn't take advantage of your goodwill. Get a receipt for your donations and tell the IRS, "Paws off!"

Note that this deduction also applies to expenses incurred in volunteer work. So if you had to, say, buy a dorky uniform that makes you walk like a penguin or drive a considerable distance to the soup kitchen, deduct the Mumble jumpsuit and the mileage.


Energy-efficient Transportation

Got ethanol? If you need a new car, make it a hybrid. Until 2010, you can save up to $3,000 in taxes depending on the fuel efficiency of your new ride.


Gambling

Fond of poker? Blackjack? Slots? Like it more than your poker face warrants? That's why you can deduct your gambling losses. But hold 'em, Tex. You can only deduct losses from your winnings (meaning that, yes, you have to win), and you can't deduct more than you won. You'll also have to be an immaculate bookkeeper to prove how you hit the jackpot and how you got rivered.


Casualty and Theft

If you had the misfortune to be a victim of crime this year and suffered a loss of substantially more than $100, you can deduct the market value of your stolen property minus $100.


Alimony

Perhaps you're wondering why this isn't classified as Casualty and Theft. If you got divorced and the courts didn't like you, this one's for you.


Legal Advice

If you ran into trouble with the law this year, you might be able to deduct the cost of that speeding violation or the pliers you bought to break into your neighbor's basement. Just kidding. You can't do that. But if you hired a lawyer to resolve specific issues, such as a job or--ironically enough-- tax dispute, the government may show you some sympathy.


State and Local Taxes

Finally, you did know that you can deduct your taxes from your taxes, right? If your state, county, and/or city charge(s) income tax, deduct it from your federal tax. OR, if you sprung for that yacht this year, take a deduction on your sales tax instead. If you own a home and paid property tax, this is the place to deduct it, too.



Exhausted? Well, we're just getting warmed up. Tune in again for more tax tips for the single filer!


What other deductions do you take as a single filer? (Since this is a boring question, also tell us a good joke to cheer us up when we're frowning over our W-2's.)


Other Sources
Tax Savings for Single People
Tax Rate Schedules for Single Filers
How to File Taxes as a Single Person
Screw Uncle Same--Take Your Tax Deductions
We Know: 10 Common Tax Deductions (You May Have Forgotten to Take)
Miscellaneous Itemized Deductions You Can Take on Your Federal Income Tax Return
IRS Tax Deductions--7 You CAN'T Take
Taxes and the Network Marketer


Fun Link of the Day

The Singles Penalty: Tax Code Discrimination

Welcome to Singletude! Iiiiiiiiiiiiiiiiiiiit's.........tax time! With your host, Clever Elsie! {cue bouncy music that sounds like it's laughing at our misery}

Yes, income tax is one issue on which Singletude has difficulty being a positive blog. But optimism will prevail, even in the face of the overt discrimination we'll acknowledge today.

Move over married couples. You're not the only demographic that has a corner on tax code bias. In fact, marrieds mostly make out good on April 15, and it's singles who feel the pain in their pockets on Tax Day. Here's why in plain, simple, non-jargonistic language (which is not because Elsie thinks you're a simpleton but because she isn't Clever enough to explain it in jargon):


1. The tax rate for singles is higher across the board than it is for marrieds in the same tax bracket. This article has an example of a single and a one-income couple, both earning a total of $100,000 a year. The married man or woman is taxed at 25%, but the single has to fork over 28% just because he or she has committed the crime of singleness. That's a nest egg of $4,125 more a year for the married couple to buy a used car, hire a housekeeper, or go vacationing in the Caribbean. Doesn't sound much like justice for all.

2. If you're a single parent, you're entitled to a Child Tax Credit of up to $1,000 per child. But that credit phases out when your income hits $75,000. However, if you're married, your family can earn up to $110,000 before you're ineligible. Let's go over this again in case you're as confused as I am: If Person A and Person B each have two kids, Person A is entitled to more government handouts because Person A has more money and a spouse. Something here doesn't compute, and I don't think it's my underwhelming math skills.

3. If you're a single parent whose child lives with you less than half the year, you can't claim him or her as a dependent even though you may be covering half of his or her expenses. If your child splits his or her time equally between you and your former partner, the partner with the higher income gets to claim the child. Again, what's wrong with this picture? It's as if Dali thought up our tax system.

4. You can usually file as head of household, a move which saves you big, for any dependent you support, including kids, parents, siblings, extended family, and even domestic partners. But there's a catch. If your state outlaws cohabitation, you can't claim a boyfriend or girlfriend. Further, if you've been married for even a month during the past year, your husband or wife can be your dependent, but you must have lived for the entire year with a domestic partner to qualify for the same deduction. Obviously, filing jointly, the biggest money saver of all, is not an option. In other words, save sex for marriage, boys and girls, or Uncle Sam will take away your pocket change.

5. While single homeowners are making gains, most houses are still the property of married couples, and those married couples get a nice little break known as the mortgage interest deduction, which means these twosomes can expect reimbursement for the interest paid on their monthly mortgages. In most states, however, renters don't get a similar deduction for the cash laid out on apartments every month. Instead, up to half the income of the single renter drains into the pockets of a wealthy landlord and is never seen again.


The above examples of flaming inequity might prompt you to ask exactly what has become of the mythical marriage penalty or if it was ever real at all. It does exist, most notably when marital partners file jointly and their total income propels them into a higher tax bracket than either would have been in if they'd filed separately. But this only occurs when the partners earn roughly equivalent incomes or when they qualified separately for the Earned Income Credit for the working poor but lose eligibility with their combined salaries. However, if husband and wife have an income disparity, their tax breaks will dwarf those of singles, and the greater the disparity, the bigger the break. Despite lip service to working families and career women, Congress still prefers the stay-at-home mom model.

Now pretend for a moment that you read about the above tax system unaware that it described the United States. What kind of country would take shape in your mind? Certainly not one in which nearly half the population is single...or one in which there are cohabiting couples, gay or lesbian pairs, low-wage earners, city dwellers, or anyone who isn't part of a traditional male breadwinner suburban society. And we haven't even scratched the surface of the injustices imposed by the estate tax, insurance benefits, and social security.

Married couples claim they're entitled to bigger breaks because they have double the expenses. But the platitude that two can live as cheaply as one rings true for rent, utilities, household purchases like TVs, computers, and furnishings, and transportation if the couple is careful. So singles are the ones who really need the relief. Furthermore, marrieds have no call to complain about getting bumped into a higher tax bracket when they're still taxed at a lower rate than singles in the same bracket.

While there's unfortunately no loophole to wiggle out of the singles tax penalty, you should be wise to the steps you can take to minimize your liability as a single filer. Tomorrow, Singletude covers some of them.


What do you think about the discrepancy between tax rates for single and married filers? Can you think of a better solution?


Fun Link of the Day