Wednesday, February 02, 2011

Income taxes in Ohio - the argument for Married Filing Separately

After getting married in May of 2010, this will be my first year filing my income taxes as anything other than single.

In an effort to reduce my tax burden, I evaluated the options of both Married filing Jointly, and Married filing seperately.

Every where I read, from FreeTaxUSA.com to turbotax.com , the repeated message is that it is rarely in your best interests to file separately.

If you live in Ohio - rethink this.

You can find the tax tables for 2004-2012 here.
For 2010

Ohio Taxable IncomeTax Calculation
0 – $5,0500.618% of Ohio taxable income
$5,050 – $10,100$31.21 + 1.236% of excess of $5,050
$10,100 – $15,150$93.63 + 2.473% of excess over $10,100
$15,150 – $20,200$218.52 + 3.091% of excess over $15,150
$20,200 – $40,350$374.62 + 3.708% of excess over $20,200
$40,350 – $80,700$1,121.78 + 4.327% of excess over $40,350
$80,700 – $100,900$2,867.72 + 4.945% of excess over $80,700
$100,900 – $201,800$3,866.61 + 5.741% of excess over $100,900
More than $201,800$9,659.28 + 6.24% of excess over $201,800


Doing these calculations for a combined income of 80k, 100k, and 160k shows that it is clearly a marriage penalty in Ohio to file Jointly:




MiddleClass , similar salaries
IncomeBase Tax% Liability
Indiv. A400001121.780.043271106.6355
Indiv. B400001121.780.043271106.6355
Couple AB800003866.610.057412666.741<-joint liability453.47<- Extra cost of filing jointly
Upper Middle Class, similar salaries
IncomeBase Tax% Liability
Indiv. C800001121.780.043272837.4355
Indiv. D800001121.780.043272837.4355
Couple CD1600003866.610.057417259.541<-joint liability1584.67<- Extra cost of filing jointly
One spouse making much more than the other
IncomeBase Tax% Liability
Indiv. E800001121.780.043272837.4355
Indiv. F20000218.520.0391408.155
Couple EF1000003866.610.057413814.941<-joint liability569.3505<- Extra cost of filing jointly