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Two of your friends, Chuck and Joan, have been dating for a year. Chuck earns $3,000 per month as the manager of an Aeropostale store. Joan is a sophomore in college and is not currently working.
They plan to marry but cannot decide whether to get married now or wait a year or two. After studying the payroll chapter in your business math class, you inform Chuck that married couples generally pay less income taxes and that if they got married now instead of waiting, he would have less income tax withheld from his paychecks. Chuck's current tax filing status is single, one exemption. If he and Joan got married, he could file as married, two exemptions.
c. Assuming Joan has three more years of full-time college before going to work and Chuck expects a 10% raise in one year and a 15% raise the year after, what is the total three-year tax advantage of their getting married now?
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