Why do I owe state taxes this year when I've always gotten money back? Wife and I filing together.

[JMont13273]

My wife and I got married last year, so we are filing taxes together for the first time.  Each year for the past 2 years, we both have gotten back ~$300-500 each from state tax returns.  Nothing has changed this year in our incomes or our elections or anything... and yet when I'm filing our taxes together, it says we now owe an extra $110 to the state.  How does this make sense?  We didn't enter into a new federal tax bracket, but is state different?

[KathrynG3]

It is possible there are some new state rules that affected  you. What state are you filing? This is a list of contacts for Department of Revenues for most states.

[JMont13273]

We’re filing in Ohio.

[JMont13273]

We’re filing in Ohio

[JotikaT2]

It is possible that your combined wages have pushed you into a higher tax bracket. 

I have attached a link to the instructions for your forms. 

OH instructions

Starting on page 32, you will see the income tax rates.  Review your income amount this year versus the prior years to help you narrow down if this is what is resulting in your tax liability this year.

[JMont13273]

So from what I gather, federal tax brackets increase when you file together (i.e. if you file as single the 24% tax bracket is 84-160k, but if you file as married the 24% bracket doubles to 166-320k), but state tax brackets do not change when filing at all.  Is this correct?  Seems counter intuitive and disincentivizes people from filing together...

[ColeenD3]

Actually, Ohio tax rates are falling.

Ohio tax rates

[JMont13273]

Yes, but it is accurate to say that if I theoretically make 100k/year and my wife makes 100k/year.... if we file separately then each of our taxes would be in the 86,900 to 108,700 bracket, which is $2,374.07 + 3.802% of excess over 86,900.

2,374.07 + (0.03802 x [100,000-86,900]) = 2,374.07 + 498.062 = 2,872.132

Multiple that by 2 and as a family we pay $5744.264 per year.

But by filing together that changes us to making 200k/year, which changes our bracket to the 108,700 to 217,400 bracket, which is $3202.91 + 4.413% of excess over 108,700.

3202.91 + (0.04413 x [200,000-108,700]) = 3202.91 + 4029.069 = 7231.979

Does that make sense or am I thinking about this wrong?  Will they keep our incomes separate when calculating our new tax?

[ColeenD3]

I looked into it and what you said has merit. I looked for different tax brackets in regard to filing status and didn't see anything with the exception of a couple of credits.

OH 1040 booklet