For single taxpayers, the highest tax charge of 37 p.c kicks in for revenue above $500,000. But for married couples, that charge will get utilized to revenue over $600,000.

In different phrases, two people who every have revenue of $500,000 would pay the second-highest charge, 35 p.c, on their revenue in the event that they filed as a single taxpayer.

Nevertheless, as a married couple with mixed revenue of $1 million, they might pay 37 p.c on $400,000 of that (the distinction between their revenue and the $600,000 threshold for the best charge). That may imply paying $8,000 extra in revenue taxes.

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There are also different elements of the tax code that may value married couples extra. As an illustration, whereas a person can have as much as $200,000 in revenue earlier than the Medicare surtax of 0.9 p.c kicks in, the restrict for married couples is $250,000.

Moreover, the brand new restrict on the deduction for state and native taxes — also called SALT — just isn’t doubled for married couples. The $10,000 cap applies to each single filers and married filers. (Married couples submitting individually get $5,000 every for the deduction).

After all, the deduction solely is obtainable to taxpayers who itemize, and fewer persons are anticipated to take action on their 2018 returns because of the doubling of the usual deduction. Itemizers in higher-tax states — together with New Jersey, California and New York — who marry may very well be extra affected by it, Westley stated.

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