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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Ok, I have a question related to this. Can anyone explain to me the rational that some couples use that the wife working would put them into a higher bracket, which is why she doesn't work.

Is that pretty much BS, can you not plow the ultimate max into tax preferred accounts to reduce taxable income or what?  I realize there's limits on Roth's, is this a big part of it?

TIA[/quote]

Makes no sense. Only her salary would be taxed at that rate.  Now if they had kids and the childcare costs were more than she was bringing in net, that's another issue.  My guess is that they don't understand marginal tax rates.[/quote]

I know the issue for us is that the marriage penalty is huge.  For example, under the new rates passed last night, rates go up on individuals making 220k and couples making 250k.  Thus, the second earner gets taxed at the highest marginal rate for everything he/she makes if the first earner makes more than 250. Add AMT on top of that, and the effective total tax rate on the second salary can be almost 50 percent (including state taxes).  Add in commuting expenses, day care, clothes, dry cleaning, etc, and it barely makes sense to work, even at a salary of over 100k.  I think I calculated that I would need to make at least 150 to make it worthwhile.  [/quote]

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