TCJA’s impact on high-earning married couples

September 4, 2019

The Tax Cuts and Jobs Act did not completely alter the fact that high-earning married couples pay more in taxes than they would if they were each single. The new rules simply pushed the implementation of the penalty out so that it affects only those with a combined $600,000 (or more) income.

Though not a specific tax, the penalty is the result of reaching a certain threshold sooner. A married couple hits the top 37% federal income tax bracket at $600,000, while an unmarried couple could enjoy income of $1 million before reaching the top bracket.

There are other tax implications for married couples, but there are other tax advantages, as well, that come with filing jointly—so splitting up to avoid the penalties rarely makes sense.

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