complex marriage/greencard/tax situation

Hi - I have a complex tax hypothetical situation.
My fiancee and I are going to get married (in US) either in Dec or January. We want to avoid any potential marriage penalty on taxes if possible. I'm a US citizen living in UK for a number of year. in the past my tax liability in the US has been zero (i pass the bone fide residency). She's a US res alien maintaining her US residency with this year income from both US and UK (but prob just UK next year).
a) Given the differing residencies, can we file jointly when married? If so, would i/we still be bone fide residents here? Does it matter that only one of us would be when we file jointly?
b) Whatever the answer to (a), given how high taxes are in UK relative to US is there likely a marriage penalty (incomes are likely around $90k and $70k)?

You shouldn't have any problem filing jointly (even though you have different residency status). Also, as you each have to qualify for the FEIE individually, it will not matter if you are the only one who qualifies (both spouses do not need to qualify in order to claim the exclusion).

With regards to the penalty, although I am not sure how it would work in the UK, I know in the US you should not face any significant marriage penalty. Given your incomes, the odds of you owing anything to the US are slim to none. As such,  the exact tax rate you will face (25% vs 28%) matters less. If anything, the exemptions for married couples are higher, so you may even do better filing jointly than before when you were single.

I hope this helps!!

There is no "UK penalty" - there's no joint return. Personally I would get married in January given the choice, just to make sure there are no issues. I;m not a tax professional - just an individual who has always been told "have a kid in December, but don't get married then" when it comes to US tax liability.

Do a quick check using 2013 forms/rates based on your expected 2014 income using MFS and MFJ options. That won't be accurate for 2014, but will be close enough; you already know what your 2013 tax liability was filing as single, as each of you will have filed a 2013 return.

Thanks G&V.
Agree that there isn't any penalty in the UK tax code. we'd like to have the option of dec marriage if not a huge penalty. and that seems to be the case, which is great.

The UK does not have joint filing except for tax credits and to a tiny degree the new transferrable married tax allowance.  It is possible that HMRC might argue that marrying a UK domiciliary could be indicative that you have acquired a domicile of choice in one of the countries of the UK.  Domicile status may not currently be important for you though.

From a US perspective, your wife to be will want to review if she might be subject to the expatriation tax on future abandonment of her green card.