Wife and I both make roughly 40K per a year. We only get 1 W2 apiece. No extra deductions, no children. Very simple. Why do we get more on our returns filing separately?

[zypherstyle]

Filing our taxes jointly or separately nets us the exact same federal return.  The difference is in State. Almost a combined $300 extra if we file separately. We live in Ohio

[MaryK1 · Accepted solution]

In Ohio, the tax rate is much higher on the combined income, so a joint return with $80000 pays $2245 but two separate returns with $40,000 each pay  $872.  It is not common to see such a result, and as fanfare said, do the one with better results (especially if you can file for free! with TurboTax)

[Hal_Al]

I concur with TTurboTaxMaryK1, it's an Ohio phenomenon. If you go to H&R block and similar places; they automatically do a MFS vs MFJ comparison.

Here's the problem in Ohio: Unlike the federal tax system, Ohio does not have separate tax rates based on your filing status. The 2nd spouse's income is added to the first spouse's income and that total income is pushed into a higher tax bracket. So, a single person and a married couple making the same income are each taxed at the same marginal rate. Ohio tries to compensate for this with a Joint Filing Credit, but it is limited and doesn't always make up for the higher rates. The Joint Filing Credit also requires qualifying income, so if the spouse does not work (or have retirement income other than social security), the couple does not usually even get the credit. In addition, some of the state credits are on a "per return” basis rather than per person. A retired senior couple  gets $250 in retirement/senior credits, on a joint return, while separate filers get $500! Ohio requires you to use the same filing status that you used on your federal return; so filing a joint federal return and separate Ohio returns is not an option.

[fanfare]

Sometimes it works out that way.

You may choose the filing status that yields the best result for your circumstances.