Sunday, February 12, 2006

A Massachusetts Marriage Penalty

I noticed this the first time I did taxes married, but I haven't posted about it until now.

In Massachusetts, half of the rent paid during the year is tax deductible up to $3000, as you can see if you look at Massachusetts Form 1 (the basic income tax form, the rough equivalent of a Federal 1040). If you are married, filing separately, each partner can only deduct $1500. If you are single, you can deduct the full $3000. Rent in the Boston area is well over $6000 per year, even for the smallest hole in the ground. The cheapest studios in the area go for ~$1000/month ($12000/yr). The least expensive roommate situations are usually around $500/person/month ($6000/yr).

Two single roommates can take the full rental deduction ($6000), but a married couple in a similarly sized apartment with similar rent can only take on $3000 deduction. Assuming no other complications, that's an additional $159.00 tax burden for being a married renter in the inflated Boston-area real-estate market.

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See, Massachusetts is threatening marriage!
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