Why would a married couple file jointly instead of separately with high income? Tax implications?

You're asking a really good question! For most married couples, filing jointly generally provides more tax benefits than filing separately, but there are some situations where filing separately might make sense. With your income level, here's what you should consider: Filing jointly typically gives you access to certain tax credits and deductions that aren't available when filing separately (like education credits, child tax credits, and earned income credit). You also generally get higher income thresholds for certain deductions and taxes. However, filing separately might be advantageous if: one spouse has significant medical expenses (which must exceed 7.5% of AGI to deduct), one spouse has substantial student loans on an income-based repayment plan, or you're trying to qualify for certain income-based programs. Regarding those local taxes you mentioned - this depends entirely on how your specific local tax is structured. Some local taxes have different thresholds for joint vs. separate filers, while others might look at individual income regardless of filing status.

Just wanted to share my experience with this exact situation. My wife and I were also hitting income thresholds for some extra taxes and we were looking at all options. I found this tool called taxr.ai (https://taxr.ai) that was super helpful for comparing different scenarios. I uploaded our documents and it showed side by side comparisons of filing jointly vs separately. It turned out we were better off filing jointly despite the local tax issue because of all the other benefits we'd lose. The tool showed we'd actually pay about $3700 MORE by filing separately because of how certain deductions phased out differently. Really opened my eyes to how complicated the trade-offs can be.

Follow up to my question about taxr.ai - I ended up trying it and I'm actually really impressed. I was genuinely concerned about accuracy but the detailed calculations matched exactly what my accountant had told me about our situation (we're also in the $350-400k range). It showed us that filing separately would save us about $4,200 in state taxes but we'd lose about $6,800 in federal benefits, so jointly was still better. The breakdown was super clear about which deductions and credits were affected. I might actually skip the accountant consultation fee next year and just use this for our scenario planning.

If you're dealing with the IRS phone lines trying to get clarification on filing status issues (which I was), I highly recommend Claimyr (https://claimyr.com). I spent DAYS trying to get through to the IRS about how our local tax would interact with our federal filing status. Claimyr got me connected with an actual IRS agent in less than 30 minutes. They have this service that basically navigates the IRS phone system for you and calls you back when they've got an agent on the line. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent I spoke with was able to clarify that in our situation (very similar income to yours), filing jointly was significantly better despite the local tax hit. She explained some nuances about AMT calculations that I wouldn't have figured out on my own.

I need to eat my words. After posting my skeptical comment, I was so frustrated with not getting IRS answers that I decided to try Claimyr anyway. Not only did it work, but the IRS agent I spoke with gave me information that completely changed our filing decision. Turns out, in our specific situation with investment income and the new capital gains provisions, filing separately actually saved us about $7,300 compared to joint filing. The local tax threshold issue was exactly what triggered it. The agent walked me through all the calculations, and it was totally different from what I expected based on previous years. If you're in a high income bracket like the original poster, definitely get personalized advice on this - the general "filing jointly is better" rule doesn't always apply once you factor in all the local and state tax interactions.

One thing nobody's mentioned yet - if you file separately, you BOTH have to take the standard deduction or BOTH have to itemize. You can't mix and match. With your income level and potential medical expenses, this could be a huge factor. Also, if you live in a community property state (AZ, CA, ID, LA, NV, NM, TX, WA, WI), filing separately gets even more complicated because you generally have to split most income 50/50 regardless of who earned it. That often eliminates many advantages of filing separately.

Has anyone mentioned the mortgage interest deduction limits? If you're filing separately, the limit for mortgage interest deduction drops from $750k to $375k of mortgage debt per person. If you have a larger mortgage in a high-cost area, this could be significant.

Great discussion everyone! As someone who's been through this exact scenario, I want to add one more consideration that saved us a lot of money: the Net Investment Income Tax (NIIT). At your income level ($410k), you're definitely subject to the 3.8% NIIT on investment income if filing jointly (kicks in at $250k for joint filers). But if you file separately, the threshold drops to $200k per person, which might actually work in your favor depending on how your investment income is distributed between you and your husband. If most of your investment income is in one spouse's name and that spouse makes significantly less than $200k, filing separately could help you avoid or reduce the NIIT. This is especially relevant if you have rental properties, dividends, or capital gains. Also, don't forget about the Additional Medicare Tax (0.9%) which has similar thresholds - $250k joint vs $200k separate. The interaction between these taxes and your local tax situation could be the deciding factor. I'd definitely recommend running the numbers with all these factors included, not just the basic income tax calculation. The savings from avoiding these additional taxes might outweigh the loss of other joint filing benefits.