Fed Tax Increase

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  • SheepDog4Life

    Natural Gray Man
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    7   0   0
    May 14, 2016
    5,294
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    SW IN
    I'd always heard of the "married tax", so I was very surprised when I was single again and had more taxes taken out. Didn't make a lot of sense to me.
    For a long time, there was a marriage tax penalty if you both worked. The married brackets were a bit higher than single, but not double, so more income ended up in higher tax brackets.

    For most folks, that went out the window during W Bush's administration... part of his tax cuts were making the married brackets exactly double the single ones for all but pretty high incomes.
     

    1nderbeard

    Master
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    38   0   0
    Apr 3, 2017
    2,529
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    Hendricks County
    CPA here.
    No tax rates haven't gone up, at least as of now.
    Your fed tax on your check isn't indicative of the actual federal rates. It's just an estimate based on how you fill out your w4. There are any number of variables that affect that. Check with HR to make sure your w4 is still accurate.
     

    tim87tr

    Freedom lover
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    8   0   0
    Jul 3, 2010
    1,407
    113
    Eastern IL
    Wow, that's a huge penalty for being single again (though kinda worth it if you know what I mean).
    I've done both, yes, you could very well have a windfall in the single filing:cool:
    I'd always heard of the "married tax", so I was very surprised when I was single again and had more taxes taken out. Didn't make a lot of sense to me.
    I'd always heard that from my brother. Turns out for adjusted, it's about 40k and 80k for single and married, respectively, for the Fed 12 to 22% bracket change. So if you're single making up to 80k, you'll pay an extra 10% on that extra 40k, or 4k. Easily make that up in cost of living as single:40oz:

    I believe that I'm 2026 the rates will go from the 12/22 back to 15/25 percent. That's why many are doing Roth conversions now. If possible as single status with a lower threshold of the 12%, it'd be a good time for tax deferred 401,etc if available.

    A site I enjoy for finances is Bogleheads.com, some real smart cookies on there.
     
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