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Same-Sex Marriage & Filing Taxes: What You Need To Know

Same-Sex Marriage & Filing Taxes: What You Need To Know

By on Feb 28, 2017 in Consultation, Filing Taxes, Tax Preparation, Tax Tips | 0 comments

It used to be that same-sex couples could only file separate tax returns, and if they had children, only one of them could claim a child, and only one could file Head of Household. In a sense, same-sex couples had to live like they were roommates when it came to filing their annual taxes. They had to do this because they weren’t allowed to get married, because it wasn’t legal.

This all changed in 2015 when the Supreme Court ruled on June 26 that same-sex marriage is now legal. After that, a surge of marriages was filed, but what some newlyweds didn’t bother to take into account is how to take care of their annual tax filings. It could be said that there may have been some confusion for the following tax year because depending on when you marry, you may either have to file separately or married filing jointly.

The Supreme Court ruling requires that all legally married same sex couples are to file their annual taxes as married filing jointly or married filing separately, just like anyone else.

The Good News and the Bad News

It can be said that there is a slight disadvantage for some same-sex couples who must now combine their income. A larger annual household income will boost you into a higher tax bracket causing you to pay more in taxes. However, there is the benefit of what’s called the “marriage bonus”. According to Investopedia, the marriage bonus benefits couples who bring in more income than the other, therefore, have the advantage of not paying so much more in taxes. In fact, they might end up paying less depending on what the combined income is for that household.

Two Ways to File

As aforementioned, same-sex married couples can file two ways: married filing jointly and married filing separately.

  • Married Filing Jointly – This may be the better way to file in order to get a tax break. If either of you are in school, you’ll be able to take advantage of the student loan interest or tuition deduction. If you file married filing separately, you will not be able to do this according to Investopedia. If a couple is adopting a child, then, filing jointly is the way to go in order to claim the Child and Dependent Care Tax Credit.
  • Married Filing Separately – Married Filing Separately might be a viable option if someone wants to deduct some of his or her out-of-pocket healthcare expenses. On a combined income, you’re only able to deduct approximately 10% of your medical expenses from your income, otherwise known as you adjusted gross income (AGI).

At the end of the day, same sex marriages tax filing is just like any other marriage. Income is income and will be handled appropriately and equally. So whatever your filing status is, come to Success Tax Relief and let us take care of your annual taxes. Our firm will see to it that you get the most out of your taxes, getting the best possible refund available to you, and if for some reason you owe, we’ll see to it that you’re set up with affordable monthly payments that don’t break the bank.

Call us today at 1-877-825-1179 or contact us online for a free consultation.

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