A 'marriage penalty' can kick in when income thresholds, deductions and credits are not double for spouses what they are for singles.
For higher-income couplesFor 2022, the top federal rate of 37% kicks in at taxable income of $$539,901 for single filers. Yet for married couples filing jointly, that rate gets applied to income of $647,851 and higher.For illustration: Two individuals who each have $500,000 in income would fall into the tax bracket with the second-highest rate , if they filed as single taxpayers.
Additionally, the limit on the deduction for state and local taxes — also known as SALT — is not doubled for married couples. The $10,000 cap applies to both single filers and married filers. . However, the write-off is available only to taxpayers who itemize.For couples with lower income, a marriage penalty can arise from the earned income tax credit.
Some states allow married couples to file separately on the same return to avoid getting hit with a penalty and the loss of credits or exemptions, according to the Tax Foundation.
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