Up-to-the-minute advice, information, resources, and, on occasion, commentary on federal and New Jersey state income taxes, and the various New Jersey property tax rebate programs, and insights and observations on tax policy and professional tax practice, by 40-year veteran tax professional Robert D Flach.
Tuesday, May 15, 2012
THE GAY DIVORCEE
Thanks to BO’s recent “endorsement” of same-sex marriage the internet
is a-BUZZ with the topic.This includes
the “tax blogosphere”.
A few of my fellow tax-bloggers cover the tax aspects of same-sex
Peter J Reilly, author of the blog “Passive Activities” for FORBES.COM
(where I have been a frequent guest-poster), writes frequently on the
topic.Click here for his latest
Also Enrolled Agent Jason Dinesen, who writes “Dinesen Tax
Times”.Jason posts every Monday about
gay marriage and taxes.Click here for
his latest related post.
Currently the federal government, and the IRS, does not recognize same-sex
marriages, as per the Defense of Marriage Act.From an income tax point of view I expect most same-sex couples would not be better off if they were offered
the same filing options as “traditional” married couples.However there would be potential for
substantial benefit when it comes to the federal estate tax.
I have very few clients who I either know, or suspect, are a gay
couple.Only one couple would benefit
from being able to file tax returns as married.With the others, both partners are employed and would probably pay more
tax, thanks to the “marriage penalty”, by having to file as married taxpayers.
In states that recognize same-sex marriages, and permit gay couples to
file as married, the fact that these taxpayers cannot file the same way federally
causes extra work for the tax preparer, but also generates corresponding additional
income.I have not yet had to deal with
this situation in my practice.
I am not opposed to the legal recognition of gay marriage on the
federal or state level.I am also not an
active advocate.I would not campaign
against the issue, nor would I campaign for passage of supportive legislation.If it happens I would be fine with it - but
it is not a priority issue for me.
I expect that I would leave the issue to the individual states, and would
allow same-sex couples whose tax home is in a state that recognizes the
marriage to file federal returns as married couples.