Nick Forgione
| High-income couples can feel a “marriage tax penalty” when two similar incomes stack on one joint return, pushing more dollars into higher brackets and triggering extra taxes tied to investment income and high wages. Filing separately usually isn’t a clean fix, since Married Filing Separately hits high brackets sooner and can limit valuable credits. The most practical approach is integrated planning: coordinate withholding and estimated payments, invest tax-efficiently, and time income and gains so taxes support the bigger financial plan instead of creating surprises. |
Should I avoid getting married for tax reasons?
Marriage changes a lot of things, including how your income shows up on a tax return. If you are a high-income couple filing jointly for the first time, it can be frustrating to find out your combined income is taxed differently than it was when you filed as two single taxpayers.
The decision to get married or divorced shouldn’t be made based on changes to your tax liability; however, this filing-status change can be used as a planning checkpoint. This major life decision can affect cash flow, investment decisions, and the “extra taxes” that show up at higher income levels.
What is the marriage tax penalty?
There is no official “marriage tax penalty.” This phrase gets used to describe two people with roughly similar incomes paying more tax filing jointly than they would pay if they filed as single taxpayers.
The simplest reason it happens is this: many married-filing-jointly brackets are close to double the single brackets, but the very top bracket is not double.
The top federal income tax rate in 2026 is still 37%, and the thresholds are not perfectly doubled for married couples. For 2026, the 37% bracket starts at $640,600 for single filers and $768,700 for married filing jointly.
Can the marriage tax penalty be avoided by filing separately?
As long as you’re still married, filing separately usually isn’t a clean solution to the marriage tax penalty. The simple reason is that the brackets for Married Filing Separately hit higher rates sooner, and in 2026 the 37% bracket starts at $384,350 for that filing status.
For many high-income dual-earner couples, the penalty is built into how the brackets and thresholds work. That’s why the focus should shift to practical planning to reduce surprises and manage the impact than rely on a filing-status change to “fix” it.
What other “penalty zones” affect high-income couples besides the top bracket?
For many couples, the bigger surprise isn’t the 37% bracket itself. It’s the extra taxes that can show up once your income crosses certain thresholds, and some of those thresholds are not doubled for married couples filing jointly.
Net Investment Income Tax (NIIT)
The Net Investment Income Tax (NIIT) is a 3.8% additional tax that can apply to certain investment income (like capital gains, dividends, interest, and rental income) once income exceeds a threshold.
Those thresholds are $200,000 for single filers and $250,000 for married filing jointly.
That “not doubled” gap is one reason two solid incomes can create a marriage-penalty feeling. It’s also why integrated planning matters: how and when you realize gains, and how your investments generate taxable income, can affect whether NIIT becomes part of your picture.
Additional Medicare Tax
The Additional Medicare Tax is an extra 0.9% on Medicare wages (and certain self-employment income) above these thresholds: $200,000 for single filers and $250,000 for married filing jointly.
This is another example of a threshold that isn’t doubled for married couples, so two strong incomes can reach it faster when combined.
Alternative Minimum Tax (AMT)
The Alternative Minimum Tax (AMT) still matters for some higher-income households, depending on the mix of income and deductions. For 2026, the IRS publishes AMT exemption and phaseout figures, and the married amounts are not simply double the single amounts, which can contribute to that same “threshold squeeze” dynamic for certain couples.
If a couple earns solid salaries and has equity comp, they may get the surprise in the year when the RSUs vest and they sell shares for a down payment on a home. The paycheck looks ‘normal,’ but taxable income jumps, NIIT may apply, and withholding might not be enough.
What can high-income couples do to reduce taxes?
The tax code, as it’s currently written, is not perfectly “fair” when comparing two single filers and a married couple filing jointly. Our aim at Sachetta is to help clients make smarter decisions inside the laws, as they currently stand. This is why we pay attention to how your portfolio generates taxable income.
Here are a few planning areas we review when the marriage tax penalty is on the table:
- Review withholding and estimates: After a filing-status change (or any big income jump), update both W-4s and confirm whether estimated payments are needed, so April doesn’t bring a preventable surprise.
- Tax-efficient investing in taxable accounts: Smart investment placement can reduce the chance that dividends and realized gains push you into threshold taxes like NIIT.
- Timing and coordination: For households with bonuses, equity compensation, or large one-time income events, timing and cash-flow planning matters.
- Charitable planning and itemizing decisions: For itemizers, modeling charitable deductions and state-tax rules can change the outcome, especially in higher-tax states.
The goal is not to “beat” the system. The goal is to make sure your tax decisions support your long-term plan and do not create unnecessary friction.
Is there a tax advantage to being married (for high-income couples)?
Sometimes, but it depends on how your household income is split. If one spouse earns significantly less, filing jointly can create a marriage bonus because more of the higher earner’s income fits into wider joint brackets. If both spouses earn high, similar incomes, that advantage often shrinks or disappears, and you’re more likely to feel the impact of top-end bracket compression and threshold-based taxes.
Are you going to owe a marriage tax penalty?
If both spouses have high, similar incomes, it is possible. If one spouse earns much more than the other, you may see the opposite, which is often called a marriage bonus.
Either way, we treat marriage, divorce, and other life transitions as a reason to revisit the full picture: cash flow, investments, tax planning and risk management (estate planning and insurance) together. That is where people tend to feel the most clarity and the least stress.
If this topic is relevant to you, you might want to learn more about becoming a client—our clients turn to us for advice on this and similar topics. Take the next step!
About the Author:
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Nick Forgione is a Certified Public Accountant (CPA), a Certified Financial Planner™ practitioner (CFP®) and holds a Bachelor’s and Master’s degree in accounting from the University of Massachusetts Amherst. Since joining Sachetta in 2022, Nick has helped individuals and families build long-term financial plans and uncover tax-saving strategies.
