Marriage Penalty Still Affecting Couples Despite Tax Law Changes - Articles

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Posted by: Chelsea Bennett on Aug 22, 2019

Although the Tax Cuts and Jobs Act aimed to end the “marriage penalty,” some high-income couples are still paying more in taxes after getting married, CNBC reports. The penalty occurs when a married couple’s combined income bumps them up into a new tax bracket. Once a couple’s combined income reaches $600,000, they are placed in the top 37% federal income tax bracket. A single filer does not reach the top tax bracket until around $500,000. Married couples earning a combined $250,000 who file jointly have to a pay a Medicare surtax of 0.9% and a net investment income tax of 3.8%, while single filers may earn up to $200,000 before the Medicare surtax or net investment tax is applied. The article, however, notes that there are other financial benefits for married couples that outweigh these tax penalties.