Wife made $9,800 I made $138,000 we cashed in $36K PERS from wife, would MFS be better than MFJ. did MFJ and have $3100 tax bill due. can i reduce the penalty?

I saw there may be other exceptions for section 457 accounts "You took the money out of a section 457 plan that you didn't originally roll over from another retirement plan that was a qualified plan."  I'm not sure what this means.

we itemize but nothing out of the ordinary, simple things like mortgage interest, home office expenses, donations, so trying to figure out if there is a way to reduce the penalty on the PERS distribution.