Trying to figure out taxes is hard enough if you’re in a regular heterosexual relationship. However, what happens when you’re in a gay relationship that’s pretty serious? What happens when you get married in a state where gay marriage is legal? You need to understand what type of taxes you’re going to have to face. This doesn’t mean that it’s easy for you to figure all of this stuff out. The truth is that the federal government makes same sex marriage still illegal at the federal level. States, however, can decide for themselves whether to make same sex marriage legal or not.
If you live in a community property state, this is even more difficult. What you need to know is below, and we truly hope it helps.
First and foremost, you need to realize that if you are going to file federal tax returns, you cannot check “married” or “married filing separately”. You are not considered married for federal tax purposes.
You also cannot use the head of household filing status, unless you have more than one dependent who isn’t your same sex partner.
What about children? Qualifying children can really change a couple’s taxes. However, with same sex couples you cannot both claim the child on your income tax returns. The IRS will treat the child as the qualifying child of the parent that has the child for the longer period of time. If this is a “tie,” then the IRS will grant the child to the parent with the higher adjusted gross income (AGI).
There is some good here — you can itemize your deductions or claim the standard deduction. You’re not blocked by what your same sex partner actually decides to do. This is different from married couples in the eyes of the federal government, who cannot get a standard deduction if their partner claims the itemized deduction.
Another piece of good news — both members of a gay couple who adopt a child can get the adoption credit. The maximum credit for each adopted child is $13,360. You cannot exceed that maximum for any reason. There are special needs adoptions that relax the rules a bit, but you still need to make sure that you’re documenting as much as possible.
It can be difficult to navigate what’s “OK” and not OK in terms of taxation when you’re a gay couple. Since you lose many of the marriage-provided benefits that straight couples enjoy, you can expect to pay higher taxes. What a shame. Going with an accountant that has experience with gay couples is always a good thing. Check it out today!