By Natalie Davis, CPT
You’ve got the girl and maybe even married her. Now it’s time to file your taxes, and you’re not sure where you fit within the federal government’s filing status categories.
Over the past several decades, local activists and our allies have been working hard toward equality within the District of Columbia, Maryland, and the Commonwealth of Virginia. There has been much progress, and in some cases, this includes the right to marry the love of your life. Several benefits are gained through marriage. There are also several new responsibilities, one of which is filing your taxes as a couple.
Federal and local considerations. The federal government, in particular, the Internal Revenue Service, does not recognize same-sex marriage. Basically, as a same-sex married couple, this means that you must file as a “Single” person or as “Head of Household” (if you have qualified dependents) for federal income tax purposes. Each state has its own tax code. Based on the “Jury and Marriage Amendment Act of 2009,” the District of Columbia recognizes same-sex marriages performed within the District, as well as those that are legally performed in other states. A same-sex married couple living in the District of Columbia can file a joint tax return.
Effective January 1, 2013, House Bill 438 (Chapter 2, Acts of 2012)–Civil Marriage Protection Act recognized same-sex marriage in Maryland. For income tax filings that pertain to 2012, each person of a same-sex married couple living in Maryland must file an individual income tax form to the state of Maryland.
The Commonwealth of Virginia does not recognize same-sex marriage. Both persons of a same-sex married couple living in Virginia must file individual income tax returns to the Commonwealth of Virginia.
The gift tax. Straight couples can freely transfer money, property or cars, and gifts to one another without any tax consequences; same-sex couples cannot. Anything valued above $13,000 per calendar year is considered a taxable gift. In 2012, if you transferred to your partner items valued at more than $13,000, then you are required to file a gift tax return by April 15, 2013, and the amount will be counted against your $5 million lifetime exemption. This can become a concern when a same-sex couple shares a bank account from which they pay household expenses.
A strategic tax-filing approach. Regardless of your filing status and earned income for the tax year, the most effective way to ensure that your family unit is filing accurate tax returns and minimizing the tax liability for the tax year is to review and analyze your finances together, as a couple. The following are some common topics of discussion:
For many gay couples, filing your taxes is often a complex and stressful process. Finding a qualified professional to guide you through the maze of tax codes is key to ensuring that you are in compliance and taking full advantage of all of the changes and tax credits for which you may qualify.
Jezzika Lee Perez is the President & CEO of Intelligent Tax Services; www.jezzikaleeperez.com.
Note: This article is for informational purposes only. You should consult your tax advisor regarding the details of your particular tax-filing situation. Additional information is available at www.irs.gov.
