You are having taxes withheld separately on your income, but the
amount that you are obligated to pay is the total shown on your MFJ
return. Of course, the amounts withheld are credited against the
tax due for that year, and you might have to pay more on April 15,
or get a refund back if you were over-withheld. Also, on an
MFJ return, you and your husband both are individually
legally bound to pay the entire amount, not
just your individual share of the total amount.
The marginal tax rates increase with increasing income. Since
your $65K and your
husband's $125K get summed up on a MFJ return, the tax due on your
MFJ return is greater than
the sum of taxes due on MFJ returns showing incomes of $65K and $125K
respectively. I don't know
how the $400 figure you quote was arrived at, but I would suspect that
if you have any investment income through mutual funds
at all, you both would be better
off requesting to have taxes withheld at the "Married but withhold
as if I were a single person" rate so as to avoid a penalty for paying
too little tax or having to scrabble to make a 4th quarter Estimated
Tax Payment once the mutual funds make their annual distributions
in December. In either case, you would likely need to file Form 2210
to avoid penalties for not paying taxes in timely fashion.