Now that you can marry, should you? We look at the fi­nan­cial and le­gal ram­i­fi­ca­tions of ty­ing the knot.

GA Voice - - Front Page -

A life­time com­mit­ment and a new tax fil­ing sta­tus. You’ve got ques­tions and we’ve got an­swers.


Last year’s hard-fought vic­tory at the Supreme Court has brought an over­whelm­ing sense of joy and dig­nity to same­sex cou­ples across the na­tion, but nav­i­gat­ing through the Amer­i­can tax sys­tem as a newly mar­ried cou­ple has also been rife with con­fu­sion and ques­tions. I’m here to an­swer a few of the most press­ing ques­tions I’ve re­ceived from same-sex cou­ples now that tax sea­son is upon us.

Can same-sex spouses file fed­eral tax re­turns us­ing a “mar­ried fil­ing jointly” or “mar­ried fil­ing sep­a­rately” sta­tus?

Yes. Thanks to the Supreme Court rul­ing on June 26, 2015, in the Oberge­fell de­ci­sion, if a same-sex cou­ple is legally mar­ried, whether they were mar­ried in the United States or an­other coun­try, the IRS and all states will rec­og­nize them as mar­ried for tax pur­poses. This means they will fol­low the same set of tax laws for het­ero­sex­ual mar­ried cou­ples. Your fil­ing sta­tus on the last day of the cal­en­dar year will de­ter­mine your fil­ing sta­tus. If you were mar­ried or di­vorced as of Dec. 31, 2015, you can file as mar­ried fil­ing jointly (MFJ) or mar­ried fil­ing sep­a­rately (MFS) if you are mar­ried on Dec. 31. If you are di­vorced, you will be sin­gle or head of house­hold if you qual­ify for those fil­ing sta­tuses. The last day of the year de­ter­mines how you file for the en­tire year, even if you got mar­ried or di­vorced on the very last day of the cal­en­dar year.

If you get mar­ried dur­ing the year, you can file as mar­ried fil­ing jointly (MFJ) or mar­ried fil­ing sep­a­rately (MFS). When you file a joint re­turn with your spouse, you are jointly and sev­er­ally li­able for what­ever is on the re­turn. This means whether or not li­a­bil­i­ties are at­trib­uted to you, if you file a joint re­turn, you be­come fully re­spon­si­ble for li­a­bil­i­ties on the re­turn. If you have any con­cerns or do not want to take on the li­a­bil­i­ties of your spouse, you would need to file as mar­ried fil­ing sep­a­rately.

Ad­di­tion­ally, you would file your state re­turns as MFS or MFJ.

What are the ben­e­fits ei­ther way?

of fil­ing

Be­lieve it or not, there are ac­tu­ally mar­riage penal­ties built into the tax code. Typ­i­cally if one spouse has lower or no in­come and the other spouse has in­come, it is ad­van­ta­geous to file a joint re­turn at both the fed­eral and state lev­els. How­ever, if both tax­pay­ers are in higher tax brack­ets, it could cre­ate more tax due to file a joint re- turn. The “mar­riage penalty” kicks in once two sin­gle peo­ple each make more than $37,450 for 2015 and $37,650 for 2016.

If same-sex spouses (who file us­ing the mar­ried fil­ing sep­a­rately sta­tus) have a child, which par­ent may claim the child as a de­pen­dent?

Nor­mally, this should be the par­ent with the high­est an­nual gross in­come (AGI) and be­cause this can get a lit­tle com­pli­cated, you may need to re­ally eval­u­ate if MFS is worth the loss of many of the tax ben­e­fits.

If an em­ployer pro­vided health cov­er­age for an em­ployee’s same-sex spouse and in­cluded the value of that cov­er­age in the em­ployee’s gross in­come, can the em­ployee file an amended Form 1040 re­flect­ing the em­ployee’s sta­tus as a mar­ried in­di­vid­ual to re­cover fed­eral in-

come tax paid on the value of the health cov­er­age of the em­ployee’s spouse?

They would not amend their re­turns. Rather, un­der Rev. Rule 2013-17 the em­ployer has a way to rem­edy this for the tax­payer so the in­di­vid­ual should con­sult their HR depart­ment to get this re­solved. My un­der­stand­ing of this is that only the FICA/Medi­care with­held will be re­funded to the em­ployee from the em­ployer, as the fed­eral and state taxes with­held will be rec­on­ciled when they file their per­sonal in­come tax re­turns. The em­ployer will only re­fund the em­ployee’s por­tion of the FICA/Medi­care taxes if the tax re­turns for which they are claim­ing a re­fund are filed as mar­ried fil­ing jointly or mar­ried fil­ing sep­a­rately. If the tax­payer filed their re­turns as sin­gle or head of house­hold and have not amended their re­turns to mar­ried fil­ing jointly or mar­ried fil­ing sep­a­rately, they will need to amend their re­turns be­fore re- quest­ing the re­fund from their em­ployer. In many cases, this may not be ad­van­ta­geous and could cost the tax­payer more in tax than the re­fund they re­quested.

Lynn Pasqualetti is li­censed with the Na­tional As­so­ci­a­tion of State Boards of Ac­coun­tancy (NASBA), the US Trea­sury and many states as a Con­tin­u­ing Pro­fes­sional Education (CPE) provider for cer­ti­fied pub­lic ac­coun­tants (CPAs), en­rolled agents (EAs) and tax at­tor­neys where she has taught classes to other pro­fes­sion­als in her in­dus­try since 1992. Lynn spe­cial­izes in tax­a­tion, con­sult­ing and busi­ness de­vel­op­ment.

This is gen­eral tax in­for­ma­tion and should not be re­lied upon to pre­pare your re­turns as each sit­u­a­tion is unique and may have other vari­ables. Please con­sult a CPA or EA who spe­cial­izes in fed­eral and state tax mat­ters.

Editor’s Note:

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