His high income is bumping me up into a higher tax rate (41%) so that my portion of the tax bill is roughly $12k more for 2015 than if I was single.
I just did a quick calc and got $2,000 federal tax savings for filing as two singles versus joint.
What jwright & dandarc said. Being married isn't costing $12,000 in taxes. It's costing $2,000. However for whatever reason, the way you folks divide up the withholding and/or tax payments has been shifting $10,000 in tax paid from him income to you. So why not just have him transfer $10k or so over to you each year in each April (since he'd have to pay that extra money in taxes anyway if you got divorced for tax purposes), and avoid all the messy legal paperwork and unintended consequences of an actual divorce?
Sorry to bump an old thread but I wanted to expand some thoughts on this angle. Op has never replied to this thread but I wanted to give some advice if they do. - Take a look at a
tax table. I'm not certain whether this is the case for Op, but I see time and time again where people think a 41% marginal rate means all the income is taxed at 41%. That's simply untrue. Who's to say your income isn't the part of the income taxed at 10%, and 15%? Even with his high income, the first $75300 of income only pays $10367.50 of taxes. (13.8% and this doesn't even consider a personal exemption or standard deduction. - No reason for me to look at these considering your combined income anyways.) - This is the exact opposite of your approach that your income encounters the most of yours combined tax bill. (Obviously, a glance at the single tax chart shows this is not fair either.) To be fair, a compromise is somewhere in the middle. As others have said run the numbers for the TOTAL TAXES DUE as being Married Vs two singles including all information such as deductions. The $2000 given by the other posters is a very rough estimate since they don't know your exact situation, but I couldn't imagine that the true cost anywhere close to $12,000.*** "Having him pay you" for the tax credit you are causing him is along the right lines, but I would phrase/accomplish this differently. Simply have the correct amount deducted from your pay. I.E. The amount that would be due if you were filing single. (Whatever the true cost between the filing statuses you can negotiate this. If being Married costs the couple $2000 in taxes, then you may each cover $1000 of it, or you may expect him to cover the full $2000) If you are remotely mustacian (It sounds like you are.) , then you don't need to use tax with-holdings as a "Savings Account". For example, if the tax due on $60000 would be $8000 filing single, then you have $8000-$9000 withheld during the year.
***FYI: If your marriage is truly costing you, it is primarily because of his enormous income. The tax chart generally rewards people with drastically different incomes. (Although, marriage penalties can be seen with the Earned Income Credit, Standard Deduction, Minimum tax, and other places)
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With that line of thought complete, perhaps Op or other posters might want to chime in on the following related question(s) or point out a thread where they would better be discussed.
How is the greater earner **** "using" his/her income?" What is your agreement on how this effects you and your spending?I.e. Many things as a couple end up being inter-related. The high earner buying a new pickup truck, donating to charity, or paying for personal luxuries may not have a strong impact on the partner's spending.
However I have seen personally where a question of how responsibility should be shared for things like living in an expensive house, luxury vacations, dining, or similar activities that both persons are likely going to participate in.
As the low spender who wants these things less, are you still required to pay 50% of them or refuse participation? How could you possibly split this in a fair manner?
**** Sometimes the high earner is also the high spender, however this is not always true.
