You don't understand money!!!

[KTP]

Makes much more sense now that I see that single and joint filings have different brackets. I understood it as the second income being taxed at the first income's maginal rate going up. That seemed crazy steep.

KTP, to your point, in Canada even if it's seperate filings most credits and aid are dependent on family income (so the low income spouse doesn't get aid destined to low income earners when the spouse makes significant money).

Oh, then that is not really filing seperate. If you could truely file as single then it would not make a difference what income the spouse made.

[thekid]

Oh, then that is not really filing seperate. If you could truely file as single then it would not make a difference what income the spouse made.

You file seperate but declare you are married, to whom and link to their return. Being married only affects certain tax credits and aid (as mentionned in my previous post) and allows you to maximize certain permitted deductions (as in you can apply certain deductions to the highest earner regardless of who incurred them). Other than that (which is not much), both are taxed on their respective incomes on the same brackets as applies to any other single person.

What I had initially understood being the US system is that the brackets for married couples were the same than for singles (as in Canada), but that married couples had to combine both incomes (therefore the second income would start being taxes at the first income's marginal rate). That seemed crazy. However, with different brackets, I'm sure it all comes out to roughly the same.

[LivingAlmostLarge]

No it doesn't. Depends on many factor including how much each spouse makes. That influences if it's worth working when kids come or hugely disparate incomes. Child tax credits, student loan deduction, etc all come off as well for certain income levels. too complicated.

[thekid]

No it doesn't. Depends on many factor including how much each spouse makes. That influences if it's worth working when kids come or hugely disparate incomes. Child tax credits, student loan deduction, etc all come off as well for certain income levels. too complicated.

I don't mean to keep beating on this, but I find it interesting. Fiscal policy is often used not only to get tax revenu, but also to encourage certain behaviours and discourage others (it's also social policy).

You mind giving me a brief overview of which situations are particularly advantaged in joint filling and which are particularly disadvantaged? I'd guess if they are more severely impacting large discrepencies in income, they want one parent to stay at home when the other makes a large(r) income (sort of a "pro family" policy through "penalties" rather than incentives).

[couchrobt]

True, bad spending habits is the main or the big chunk of issue why you get in the pit or get broke. Why keep spending more than you can afford?

[MonkeyMama]

For the most part, buying homes, investing, and having kids, are specifically encouraged.

Families doing better on one income, in the tax code? I think a lot of what we see today was unintentional (like AMT, which has nothing to do with social preferences), but, that said, it was more how the tax system was initially set up. Set up in a time when women weren't generally working professionals or big earners.

Saving for retirement and giving to charity is very strongly encouraged by our tax code.