Accountants are going to have to get creative should the legislation pass. In addition, the marriage penalty is enormous. If I was in that income bracket I would hold off getting married before I take such a large hit. If passed, the new tax law hits married couples hard if they make $450k or more. If two people earn near the $400k each not getting married gives you $350k of income at the lower tax rates than a married couple earning the same.
Tags: capital gains, taxes
The proposed 28.8% rate would kick in at $400,000 of taxable income for single filers and $450,000 for married joint filers. That’s around $50,000 below the thresholds for the current 23.8% top rate, which are $445,851 for single filers and $501,601 for married joint filers.
This is the bad news for people with income in the $400,000 to $1 million range—even if it’s from a one-time windfall like the sale of a home or business.Capital Gains and Capital Pains in the House Tax Proposal – WSJ