Same-Sex Couples Pay More Taxes
BY Winston Gieseke
December 27 2011 3:35 PM ET
CNNMoney reports that the federal government’s lack of recognition of same-sex marriages, which forces legally married couples to file separately on their federal returns, results in as much as $6,000 per year in additional taxes.
Not only are these couples losing out because they can’t take advantage of the lower tax rates that come from combining incomes and deductions, says to the article, it’s “also harder for them to qualify for certain tax breaks because the credits phase out sooner for single filers.”
“It’s costing these families thousands of dollars a year, as well as the emotional pain and suffering,” said Ken Weissenberg, a partner at accounting firm EisnerAmper and one-half of a same-sex married couple.
CNNMoney based their information on a series of same-sex versus opposite-sex tax scenarios it presented to H&R Block. A seemingly equal household with one working parent earning $100,000 per year and one stay-at-home parent earning nothing produced radically different results when toggled between opposite-sex and same-sex situations.
While a heterosexual couple can file jointly and divide their assets, the homosexual couple must file separately, the breadwinning spouse as “head of household” and the non-earning spouse as “qualifying relative.”
In this particular scenario, says the article, the same-sex household would owe $4,543 more tax than the opposite-sex household. This is because the “head of household” designation pushes more income into a higher tax bracket and the individual filings provide lower standard deductions than “married and filing jointly.” The gay head of household is also subjected to a tax on the stay-at-home spouse’s health insurance premiums that the heterosexual breadwinner isn’t responsible for.
In addition to lowered benefits, same-sex couples who live in a marriage equality state often end up having to fill out twice as many forms when filing their state and federal returns. The additional — and generally more complicated — filings result in higher fees from their tax preparers.
Not that it’s not worth it, says Weissenberg, who says, “If I had to pay twice as much in taxes to be married to my husband, I would.”
Read the full article here.