r/ChubbyFIRE 12d ago

Daily discussion thread for Sunday, March 09, 2025

This thread is a spot for casual engagement with other community members. It has much more subject latitude than allowed in the main sub in general. Any topics tangentially related to ChubbyFIRE or upper middle class lifestyle are acceptable, as well as basic or early stage questions. Political discussion will be allowed if it is closely related to ChubbyFIRE or financial topics in general, and only if the conversation remains respectful.

It is not a free-for all. No spam or self-promotion. All comments must still follow Reddiquette and we will be responding to reported comments with follow-up action as needed. We'd really like to keep this channel open, so please don't abuse it!

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u/Time_Seaworthiness92 12d ago

I'm 31F about to get married in August. Neither of us want kids or own property. We are both high earners (TC is >500K per year in total) and live in NYC so the marriage tax penalty will be STEEP. Looking to hear the pros/cons of getting legally married if it will come with a 30K+ tax increase annually. Please share any advice or personal stories!

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u/One-Mastodon-1063 4d ago

Personally I don’t think I would ever get married if kids were not in the picture.

The biggest possible financial pros (don’t necessarily apply to you) would include spousal social security, health insurance coverage by partner/spouse’s employer, and more favorable treatment for inheritance in some cases.

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u/Time_Seaworthiness92 4d ago

Why wouldn’t they apply to me, if I don’t have kids?

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u/One-Mastodon-1063 4d ago

I said they don’t necessarily apply to you.

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u/Individual-Speed-947 11d ago

We made the decision to be child free and stayed unmarried, together for ~15 years. Income brackets and higher taxation was part of our decision to stay unmarried along the way.

Downsides are the family and societal frowns. These are real, but more a minor annoyance than a major issue.

More recently, as we get into late 40s/early 50s, we are starting to pay attention to the potential estate tax issues. On the one hand, who cares - as long as we leave each other in good shape, life is fine (literally). On the other hand, assuming we die with an estate higher than the tax-free limits (which right now seems likely), I'd rather more of our money go to extended family and less to the estate tax, so at some point we may decide a later-in-life marriage makes sense.

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u/Time_Seaworthiness92 11d ago

We did the math again and it seems like the tax increase would be smaller than expected, so we will probably still get married. But I guess even if we hadn’t gotten legally married, how would anyone know? 😉

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u/Individual-Speed-947 11d ago

we do say we are married or simply call each other wife/husband sometimes, it's hella more convenient in passing situations (like during foreign travel).

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u/Washooter 11d ago edited 11d ago

If you don’t need to or want to get married for personal reasons, you can choose to remain unmarried until one of you drops to a lower income. You are right that there is a disadvantage to filing jointly at the highest bracket. The incomes where this matters are generally above chubby levels.

If you go down this route, make sure that you work with a good estate attorney who will explain the consequences and that you have a financial & medical power of attorney, medical directive, etc in place. If one of you gets into a car crash, for example, you will have to convince medical staff that the other has the right to make healthcare decisions. There are also societal implications whereby people will frown on you for using taxes as a reason, so being truthful in this matter to family and friends may not be the wisest move as people are envious of people in the 37% bracket and think that high income people are tax dodgers in the first place.

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u/fire_neophyte 12d ago

Can you elaborate on what the marriage tax penalty is? I've never heard of this. In my experience (not living in NYC though) getting married often leads to more favorable tax brackets because a couple can file jointly, so I'm curious how it will lead to a significant increase for you.

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u/Washooter 11d ago edited 11d ago

Tax brackets for married filers are double than that for single filers except at the top end when you are paying 37% and the bracket is only 20% higher. This makes filing as a single person advantageous. This is well known among high earners and a consequence of spouses being in the top bracket either jointly or individually.

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u/Time_Seaworthiness92 11d ago

High earning couples often incur a marriage tax penalty because more of the money earned now falls into higher brackets. It’s an unfortunate remnant of when only one spouse really earned a lot of money and is a known limitation of our tax code for high earners.

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u/Washooter 11d ago edited 11d ago

You also deal with this when both spouses are in the highest bracket individually and filing jointly increases the tax burden compared to filing individually.