This seems to be a hot topic on capitol hill recently, but don't let it fool you. There is no such thing as a "marriage penalty" for individual taxpayers. In fact, married people get all the best breaks, especially if they have kids.

It should be called the "divorce penalty". Here's a little friendly advice: if you're going through a divorce, one of the first things you should ask your attorney is to expedite the paperwork to declare you legally seperated. Your divorce doesn't have to be final to do this, I think you only need your spouse's agreement.

Using the filing status "married seperate" is the worst thing you could ever do! Our IRS reps say it, H & R Block instructors told my wife the same thing, and here's the proof. This is a list of a few of the things that happen when you opt for this filing status:

--You get a smaller standard deduction
--If your spouse itemizes deductions, you lose the standard deduction altogether (you have to itemize)
--You are not eligible for earned income credit
--You are not eligible for the new tuition and fees credit
--If your employer covers you or your spouse (or both) in any kind of retirement plan, you can no longer contribute to an IRA at all, unless your income is under $10,000

(These are a few that I've come across just in the last 2 days. I'll add more if I find them--if you know of any, please let us know.)

IF YOU'RE "LEGALLY SEPERATED" ON DEC 31 OF ANY TAX YEAR, YOU ARE FREE TO FILE AS "SINGLE" FOR THE WHOLE YEAR (OR "HEAD OF HOUSEHOLD" IF YOU HAVE A DEPENDANT), AND YOU WON'T GET HIT WITH THESE PENALTIES.

How do you think married people get all the breaks? I'am married with two children , only my husband works.My best friend who is living with her boyfriend and two children. My husband made aroud forty thousand last year. My friend made twenty-four thousand her boyfriend made seventeen thousand,together that's forty-one, so since there's no marriage, they get to file separatly, but live and pay bills "as if they were married.So they make just as much as us but at the end of the year,we get back about $3000 and they get $9000 combined just because they are single? Does this make sense?

Mahal is no longer around to answer your question. But this topic was one of his favorite soap boxes. There are times when married filing separate is unavoidable. As for your situation you, like many of us in the past, just have to grit your teeth.

Things have changed since this question was posted.

Married people fair far better in all areas of personal income tax than any other filing status, but you have to file "joint". By filing seperate you become ineligible for a host of benefits.

(Filing married seperate is "never" unavoidable.)

To answer your question, Jodi, you shouldn't compare how much your refund was but how much you actually paid in taxes compared to them. The reason they may get back a better refund might be as simple as having more money taken out. If they both have "single-1" on their W-4s and your husband has "married-4", he will have far less withheld from his pay and reduce your refund.