arriage was never designed as a financially rewarding experience, but neither was it meant to penalize your love. Yet, depending on whether both spouses work, that's exactly how the government treats your legal union.

The rates for married individuals, filing either jointly or separately, are much lower than those for single, unmarried taxpayers. For example, a single person with 1998 taxable income of $61,400 pays a marginal tax rate of 31 percent and a total tax of $13,896.50. On the other hand, a married taxpayer with a spouse who has no income would pay a marginal rate of 28 percent and a total tax of only $11,686.50. If you're planning a New Year's wedding, advancing it only a few days to Christmas would save you $2,210 - enough to pay for your honeymoon.

Ah, but what if both spouses work? There is, in effect, a tax on the marriage of working spouses. Consider the case of two people who each report $25,350 in taxable income this year. They would each pay $3,802.50 in taxes, or a combined $7,605. If they get married before the end of the year, their total income would be $50,700. They would have to file either a joint return, or as married individuals, file separate returns. Either way, their total tax bill ends up as $8,690.50, or $1,085.50 more than what they would have paid had they remained unmarried.

This extraordinary penalty on marriage is the result of previous congressional actions that attempted to correct apparent inequities in the old tax structure. Prior to 1948, husbands and wives in community property states could each claim half their household income for tax purposes even if only one of them actually earned the income. The law of the individual state attributed half of the income ("property") to the other spouse.

For example, if only the husband worked, earning $30,000, both he and his wife would have reported $15,000 in income. Given our progressive tax rate, where each additional dollar earned is taxed at a higher marginal rate, this was a substantial advantage.

In 1948, the federal income tax code was amended to allow this benefit to all married taxpayers, including those not in community property states. This was done by doubling the income brackets for married taxpayers associated with each rate. For example, if the first $500 in income was taxed at 11 percent for a single person, the first $1,000 of income for married couples would have also been taxed at 11 percent.

While those who were married rejoiced, single taxpayers making the same income as married couples were subject to much higher rates. In 1970, for example, single taxpayers could have been liable for as much as 42 percent more in taxes than a married couple earning an equivalent income. In response to this harsh inequity, Congress in 1971 changed the rates for single taxpayers to reduce this differential to 20 percent maximum. The Tax Reform Act of 1986 reduced the difference even further.

Unfortunately, for married couples where both partners work, the marital unit was subject to the marriage penalty. The first dollar earned by the second spouse is now taxed at the highest marginal rate of the first spouse. (In other words, if the first spouse is paid $50,000 a year, the second spouse's income is taxed at 28 percent, rather than the lower 15 percent rate.) According to the Congressional Budget Office, 42 percent of couples filing jointly in 1996 suffered the marriage penalty.

This tax penalty on marriage where both spouses work is compounded by the standard deduction. A married couple is allowed a total of $7,100 of non-taxable income. Two single workers get $4,250 each for a total of $8,500. By getting married, an additional $1,400 becomes taxable - and at the higher rate.

It gets even worse for higher-income families, who lose their personal exemptions faster than if they stayed single. Currently, each individual is allowed a personal deduction of $2,700. That deduction is phased out, however, for individuals with incomes starting at $124,500. But if you're married, the phase-out begins at $186,800. So a married couple that collectively makes $309,300 gets no personal exemptions, but an unmarried couple, each earning half of the $309,300, gets to deduct the full $5,400 from their two returns.

Because your marital status for the entire year is based on your status as of Dec. 31, some high-income earning couples have actually divorced at year's end to capture the lower tax. The divorce, however, must be real with significant economic consequences (for example, loss of rights under a will) and not merely a sham to get a tax break.

What other options do you have? If you're married, the law prohibits you from filing as single. However, you can file as married filing separately. Unfortunately, this may save you little to no taxes. The rates for married filing separately start at incomes approximately half those for married filing jointly. For example, the 36 percent rate for those married filing separately in 1998 starts at $77,975; for married filing jointly, the 36 percent rate starts at $155,950.

It may pay to be married but filing separately if any of your deductions are subject to a percentage limitation. For example, you can only deduct those medical expenses that exceed 7.5 percent of your adjusted gross income (AGI). Similarly, your miscellaneous itemized expenses must exceed 2 percent of your AGI. So if you have big expenses in one of those categories, you could more easily qualify for the deduction if you file separately. For example: Say I earn $20,000 and my wife earns $80,000. That means the first $7,500 of our medical expenses and the first $2,000 of miscellaneous itemized deductions are disallowed. However, if those expenses were incurred by me, I only lose $1,500 in medical ($20,000 x .075) and $400 in miscellaneous itemized expenses. This potentially creates $7,600 in additional deductions ($7,500 + $2,000 less $1,500 + $400). If you have substantial medical or miscellaneous itemized expenses, it would pay for you to do your return both ways to see which produces the lower tax.

Note, however, that a husband and wife filing separate returns must use the same method of claiming deductions. If one itemizes, both must itemize. This could result in a situation in which one spouse who itemizes has an allowable itemized deduction in excess of the standard deduction ($3,550) by, say, $2,000, but the other spouse who has no itemized deductions would have to add $2,000 to income (subtract $2,000 from $0 in deductions).

This may be profitable if the spouse who has itemized deductions is in a higher bracket. For example, if one is in the 31 percent bracket and the other is in the 15 percent bracket, the first would save $620 ($2000 x .31) at a cost to the second of only $300 ($2,000 x .15). That's a net gain of $320 by filing separately.

Are you still with me? It gets worse. The advantage described above often dissolves when you compare the tax schedule for married couples filing jointly vs. married filing separately.

For example, filing jointly, a husband with a taxable income of $50,000 and a wife with $60,000 would pay $25,525.50 in taxes on a total income of $110,000. Filing separately, the husband would owe $14,312.75 and the wife would owe $11,247.25; a total of $25,560 and a net loss of $34.50. Note that as the rates are condensed, the potential net loss is reduced.

The bottom line: There is no magic formula. If both spouses earn income, it is always to your advantage to prepare your return each way to see which provides the lowest tax.