February 5, 2003
The Cincinnati Enquirer
Except for unusual situations, when both spouses are employed, they are almost always better off filing separate returns instead of joint.
This is due to Ohio’s progressive income tax.
The marriage penalty begins when joint taxable income reaches $5,300. (This assumes equal income and no dependents.)
With four kids (six exemptions), the marriage penalty begins when joint taxable income reaches $10,400. That same family of six will pay a marriage penalty of $258 when their joint taxable income reaches $50,000. And $668 when their joint taxable income reaches $100,000.
The only way to avoid the Ohio marriage penalty is to file separately.
Ohio law requires that the Federal return’s filing status match Ohio’s.
Filing separate on the Federal return requires that you not fund any type of IRA (unless your total income, less a few adjustments, is less than $10,000) and sacrifice a number of different credits and deductions.
Ohio has created a lose-lose situation for working spouses.
The fix is simple: Ohio should allow us to choose a filing status different from the Federal return’s.
Kentucky is one state that I know of that allows this.