Can anyone explain why filing separately gave us a bigger tax refund than joint filing?

That's actually an interesting situation! While filing jointly is generally more beneficial for most couples, there are certain scenarios where filing separately can result in a higher refund. One common reason is state taxes. Some states have tax laws that interact differently with federal filing status. If you're in a state with unique tax provisions, filing separately might optimize your state refund enough to offset any federal benefits from filing jointly. Another possibility is income-based deductions or credits. When one spouse has significantly different income, medical expenses, or student loan interest, filing separately might allow the lower-earning spouse to qualify for deductions they wouldn't get jointly. Without seeing your full tax situation, it's hard to pinpoint the exact cause, but I'd suggest running a comparison report in whichever tax software you're using. It should break down the differences line by line to show exactly why separate filing is more advantageous in your case.

Hey there! I ran into almost this exact situation last year. Been using https://taxr.ai to analyze my returns since then and it's been super helpful for comparing filing statuses. When my wife and I both had government jobs plus some unemployment (sounds just like you!), we were shocked to find filing separately saved us about $300. The tool showed us it was because of how our state calculated tax brackets separately vs. jointly, plus something about how unemployment withholding gets calculated. Might be worth checking out if you want a detailed breakdown of why this is happening in your specific case. It actually spotted a few other deductions we missed too!

Just wanted to update after trying taxr.ai from the recommendation above. It actually explained our situation perfectly! In our case, it was a combination of our state's tax brackets and how they calculate certain deductions separately. The software we were using didn't explain this at all. The detailed analysis showed that while we were losing a tiny bit on federal by filing separately (about $50), we were gaining over $250 on state taxes. It also pointed out a student loan interest deduction my husband qualified for when filing separately that disappeared when we filed jointly due to our combined income. Pretty impressive breakdown!

If you've been trying to call the IRS to ask about this, good luck! I spent 3 weeks trying to get through last tax season. Finally used https://claimyr.com to connect with them (there's a demo at https://youtu.be/_kiP6q8DX5c showing how it works). They basically hold your place in the IRS phone queue and call you when an agent is about to answer. Got through in about an hour instead of days of redial hell. The IRS agent explained that for federal employees with unemployment income, the math can sometimes work out better filing separately - has something to do with how retirement contributions interact with unemployment taxation at different income levels.

I need to apologize for my skepticism about Claimyr. After waiting on hold with the IRS for 2+ hours and getting disconnected TWICE yesterday, I gave it a try out of desperation. It actually worked exactly as described. I got a call back when an agent was ready to talk, and had a great conversation with the IRS rep who explained our filing status question. Turns out in our case, there's a quirk related to state tax calculations that makes separate filing better when both spouses have unemployment income below certain thresholds. I'm still shocked it worked so smoothly. Saved me hours of frustration and actually got the answer we needed.

Former tax preparer here. One thing nobody's mentioned is that unemployment compensation can create a "marriage penalty" in certain situations, especially when both spouses have it. There's a calculation where unemployment can push your joint income into a higher tax bracket, but when calculated separately, each spouse stays in a lower bracket. This is especially true when both have similar incomes like in your case. This typically happens with incomes in the $50k-60k range each, which is right where you two fall. It's one of those tax quirks that goes against conventional wisdom!

Did you check if educational credits might be part of it? My wife and I had a similar situation where she took some classes and qualified for an education credit when filing separately, but when we filed jointly our combined income was too high to qualify. The difference was almost exactly $200 in our favor when filing separately. Check if either of you had any educational expenses!