Tax season isn’t something people usually celebrate, but many married same-sex couples are finding it even more of a grind.
Married couples in New York State can file jointly or as individuals. They shouldn’t assume that one is better than the other, so preparers will likely review what the return would look like for both scenarios.
But the problem for same-sex married couples is with the federal return. Even though New York recognizes same-sex marriage, the federal government does not because of the Defense of Marriage Act.
The federal government considers the couple to be individuals. That means that one of the big financial advantages of marriage — filing joint statements with the federal government — is denied to same-sex married couples.
“On the federal return, if you have a couple where one person is not working outside the home, the person cannot be filed as a dependent,” says Sheila Cahill, a licensed tax preparer in the Rochester area. Cahill has many LGBT clients and says the federal government fails to recognize that the wife or husband may be staying home to raise children, for example.
Another basic difference has to do with tax rates.
“A lot depends on the incomes between the couple and on the disparity between the incomes,” Cahill says. “The first $20,000 of a single person’s income is taxed at about 15 percent, but for a married couple it would be roughly the first $35,000.”
Cahill says same-sex couples don’t always pay more than opposite-sex couples because there are a lot of variables; it depends on the credits and allowances permitted, she says.
But many experts say that same-couple couples are likely to be at a financial disadvantage in several areas including pensions, the gift tax, and the federal estate tax.
Cahill says for simple filings, the commercial software programs are fine and are more up to date with the marriage law in New York. But if the returns have complications, she advises working with a professional tax preparer.
This article appears in Mar 6-12, 2013.
A liberal complaining about taxes is like an arsonist complaining about the smoke.
Remember, paying taxes is a great privilege. The more you pay, the more grateful you should be for the privilege of involuntarily supporting feeble-minded old widows and little crippled orphans. As President Obama so poignantly explains, every tax break you selfishly claim — you monster! — forces our dear leader to choose between a poor child and a disabled child.
Good point, j.a.m. Obama got his tax hike on ‘the rich’ that he wanted so badly. However, that same tax law raised the payroll tax on those who work for a living – check your pay stub. Obama didn’t crow about that like he did about sticking it to ‘the rich’ did he? Now he want more tax hikes to’ balance’ cuts in spending. The reality is that we’ve had the tax hikes, and now the spending cuts must come.