Tax tips for same-sex married couples new to filing together
Friday, August 30, 2013
The hubby and I have been filing joint federal returns for 31 years. Yes, I was a child bride; that's my story and I'm sticking to it.
Now that the Internal Revenue Service is accepting 1040s from same-sex married couples nationwide, I thought it a good time to review the process of filing federal taxes as married taxpayers.
This also is something that all newlyweds, regardless of gender, need to know. And it's not a bad refresher for those of us who've been filling in joint 1040s for a very long time.
So take your spouse's hand and let's look at what to expect in the coming filing season.
Marriage timing and taxes
Your marital status at the end of the tax year determines your federal tax filing status for the full year. If you exchanged your vows on Dec. 31, the IRS considers you married for the full year.
Filing status options
You have two filing status choices, married filing jointly or married filing separately.
Yes, you might now face the marriage tax penalty. That tends to happen when both spouses make around the same money and those amounts are in the higher tax brackets. So run the numbers if this is a concern.
Still, in most cases a joint filing will produce a better tax result. There are a lot of tax breaks that aren't available to married filers who opt for separate returns.
One return from a married couple also is generally easier for you and the IRS. That probably explains why joint returns usually mean more tax savings!
Your spouse can never be claimed as a tax dependent. However, you and your spouse each get to claim a personal exemption amount, which is the same dollar amount as a dependent, on your return.
As for kids and other dependents, both you and your spouse can claim qualifying dependents on your one filing. That's right, no more calculating which spouse would benefit more by claiming the kids as a head-of-household filer. You and your husband or wife simply enter the youngsters' (or aging parent's or brother-in-law who won't move out) information on your joint 1040 under your names.
Speaking of kids, you decide to adopt your spouse's children. Congrats on your new one big family! But congratulations are all you'll get from the IRS.
A taxpayer is not allowed to claim the adoption tax credit for expenses incurred in adopting the child of his or her spouse.
Deciding on a deduction method
You must decide together which deduction method to use. One can't claim itemized deductions and the other the standard deduction amount. You're in this together now, with this being for better or worse but hopefully better in tax-filing, too.
You can, however, change your shared deduction method from year to year. If claiming itemized expenses gets you and your spouse a better tax result in 2013, do that. But if your 2014 situation makes the standard deduction the better tax choice, then y'all should claim that standard amount then.
What's your name?
I kept my maiden name when the hubby and I tied the knot. His dad, my sweet father-in-law didn't understand why; he actually took it a bit personally that I didn't want to share his and my sweeter hubby's surname.
Once he realized how we don't agree on very much, he's glad that he has plausible deniability as to my connection to his family!
Only kidding. Mostly.
My point is that your name is something else you need to think about when you marry. If you change yours to match your spouse's, let the Social Security Administration know so that your earnings and benefits records will be updated correctly.
When it comes to tax time, decide whose moniker, whether it's the same last name or different, will go first on the 1040 and stick with that order in future filings. When the information is consistent from tax year to tax year, it will be much easier for the IRS to process and track your returns.
More answers from the IRS
Those are the tax filing highlights. But wait, there's more!
The IRS has a Frequently Asked Questions (FAQ) page with more on tax matters that same-sex married couples now get to consider.
The FAQ also covers such things as dealing with the excludable value of a spouse's health care coverage or other cafeteria plan benefits and what tax issues a sole proprietor who hires his or her same-sex spouse needs to consider.
Finally, as I said yesterday, welcome to my married tax filing world. We -- and your tax advisers -- are glad to have you join us!You also might find these marriage related posts of interest:
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