Tiger Woods is in the news again. This time, there are no fresh reports of philandering – just the whopping $100 million sum he’ll reportedly have to pay his estranged wife, Elin Nordegren, as part of a divorce settlement.
 
A costly breakup like Tiger’s can be disastrous to one’s wallet, but even happily married couples face a few financial pitfalls. To be sure, there are plenty of benefits to marriage – a chance to save money by sharing expenses and an employer’s health benefits – but don’t ignore tricky financial ramifications of matrimony.
 
Though federal tax law is generally neutral to positive for low and middle-income couples, it punishes high earners. For example, if two $50,000-per-year earners were to get hitched, they’d fall into the same 25% tax bracket they’d be in if they were single. But getting married would bump a pair of $150,000-per-year earners into the 33% bracket, even though each partner would be taxed at a 28% rate if they were single. “The higher your income, the more favorable it is to stay single,” says Mary A. Malgoire, a financial advisor in Bethesda, Md.

Malgoire also notes that factors unrelated to taxation can weigh more on married couples than individuals. “A big negative to marriage in my mind is that your spouse’s long-term care costs are an obligation of your combined assets,” she says. “If you were single, you would only be responsible for your own costs and likewise for your spouse. If a single person doesn’t have the funds, Medicaid would pay.”
 
Dan Maul, a retirement planner in Kirkland, Wash., has seen some of marriage’s negative financial consequences first hand – and not just through his clients. Last year, his then-girlfriend took $10,000 from her IRA to use as a down payment on a “fixer-upper” home, thinking she’d be able to avoid the early withdrawal penalty and benefit from the $8,000 homebuyer tax credit. After she and Maul tied the knot last November, though, they discovered that getting married disqualified her from both perks.
 
“We got totally hammered with taxes just because of our joint income,” says Maul. “Add to that the taxes on her IRA withdrawal. Add to that the 10% penalty on the IRA withdrawal. Add to that $8,000 of additional taxes because we didn’t qualify for the tax credits. Love is expensive.”
 
These are just a few of the financial repercussions of marriage. But don’t return that engagement ring just yet. Matrimony still does benefit couples of many income levels, and Malgoire says the federal government may make further adjustments to the tax code this year to remedy some of the problems for higher income pairs. Just be sure to consult a handy tax bracket chart like this one from Bankrate.com and a financial advisor before you walk down the aisle.
 
And no matter what, it's unlikely your marriage will cost as you much as Tiger’s.