02/03/2026
Tax Talk Tuesdays!
We get many questions during tax season (and throughout the year), and we’ll be sharing some of them - and the answers - here through April 15th.
Question:
My spouse and I both have jobs and we file jointly. We both filled out page 1 of our W-4s at our respective jobs, so how can it be that we owe tax at filing time??
Answer:
In order to answer this question, we need to explain the concept of tax brackets.*
A tax bracket is a chunk of taxable income that is taxed at a specific rate, like, let's say the 10% Tax Bracket is the 1st taxable dollar through the 10,000th taxable dollar, and the 15% Tax Bracket is the 10,001st taxable dollar through the 50,000th taxable dollar, and the 20% Tax Bracket is the 50,001st taxable dollar through the 100,000th taxable dollar, and so on...
So, say you make $65,750 and your spouse also makes $65,750:
* If you were single, each filing a separate tax return, and each taking the standard deduction, you would each have taxable income of $50,000. Then, the 1st through 10,000th dollars of that would be taxed at 10%, and the 10,001st through the 50,000th dollars would be taxed at 15%.
* BUT, since you're married and filing jointly, you have combined taxable income of $100,000 (after the standard deduction), and the 1st through the 10,000th dollars of your combined taxable income is taxed at 10%, the 10,001st through the 50,000th dollars of your combined taxable income is taxed at 15%, and the 50,001st through the 100,000th dollars of your combined taxable income is taxed at 20%.
In the second scenario, all of YOUR taxable income dollars have fallen into the same brackets as they did in the first scenario, but all of your SPOUSE'S taxable income has fallen into much higher brackets than if they were taxed on their own.
In other words, your spouse's 1st taxable dollar is - as a couple - your 50,001st taxable dollar and that combined 50,001st taxable dollar through your 100,000th combined taxable dollar is taxed at 20%, a much higher rate than the 10% and 15% it would be taxed at by itself.
The withholding calculated by your spouse's (or your) job's payroll system has not taken this into account... and that is why many couples owe at tax time. To avoid this, married employees should fill out ALL pages of their W-4 forms. In addition (and if necessary) employers can be directed to withhold extra amounts from each paycheck.
(* For the sake of a simplified explanation, these are made tax bracket thresholds AND we are implying that tax bracket thresholds are the same for all filing statuses, though - in reality - they are not. However, this gives a general idea of why many couples fall short in their withholdings.)
A COMMON PIGGY-BACK QUESTION to this question is “Can my spouse and I simply file separate returns to get around this?”
Well, yes, BUT… in community property states like Texas, married taxpayers who file separately are required to report half of their spouse’s income on their separately filed returns (and vice-versa), thereby eliminating any benefit.
As always, ask your tax preparer for more information!
