Hopefully a simple question but I cannot wrap my head around it.
You pay federal taxes based on how much taxable income you make. Hypothetically speaking, you make $60k a year. That puts you in the 12% tax bracket. Your spouse makes $60k a year and that puts them in the 12% tax bracket. You also have an annuity of roughly $26k a year and that also ends up being in the 12% tax bracket. Based on each one of these salaries, the amount withheld is appropriate, roughly 12%. The problem becomes if you choose to file married filing joint. You add all of these salaries together and you get roughly $146k of taxable income for that year. Minus the standard deduction, roughly $28k of the remaining salary will be taxed at 22%. This unfortunately most likely will result in paying less in taxes than one should pay. How do you rectify this knowing each year you are never taxed enough and are going to have to pay the IRS each year you file? I guess you could always request to have more withheld each paycheck but that seems a little excessive given the fact that you may not want the IRS to hold onto your money tax free for the year. Any advice?
