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New Tax Laws for Married Same-Sex Couples

How Same-Sex Couples Need to File for 2013

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1040 Taxes for Married Couples

© Jeffrey Hamilton/Getty Images
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Married Lesbian Couples

© Peter Dazeley/Getty Images

 

Now that the US Supreme Court has overturned DOMA (The Defense of Marriage Law), gay and lesbian married couples have lots of new federal rights and benefits. One of those benefits is that now married same-sex couples will file their federal income tax as married couple. Another benefit is that married couples can go back and file joint married for the past three years.

If you're like me, you probably have lots of questions about how to file, how to know if you're filing correctly and what it means to file as a same-sex couple on the federal and state level. I had the fortune to speak with Lisa Greene-Lewis, CPA, from TurboTax about the new tax laws for gay and lesbian couples in 2013 and how to get the most out of filing your 2013 taxes.

 

Lesbian Life: The Supreme Court’s overturning of DOMA is exciting for same-sex couples for so many reasons—our legal relationships are now recognized by the federal government regardless of the laws in the state where we live. Please explain the ruling for same-sex couples as pertains to filing 2013 taxes?

Lisa Greene-Lewis: As a result of the overturning of DOMA, legally married same-sex couples are now treated as married for federal tax purposes.  Now same-sex couples can take advantage of  important tax deductions and credits, which were once only available to heterosexual married couples. Legally married same-sex couples also have the choice to go back and amend their last three years tax returns if they would have received a larger tax refund by filing a joint tax return.  TurboTax has a new online decision tool to help couples easily review their prior-year returns to see if they have more money coming to them.

 So, if I got married in a state like Massachusetts, where same-sex marriage is legal, but I now live in Tennessee where it is not, how will I file my state taxes—as single or as married? What about my federal taxes? Will I file as joint or as single?

If you were married in a state that recognizes same-sex marriage and now live in one that doesn't, the law requires you to file your federal tax return as a married couple.  Regarding your state tax return, some states are complying with the federal laws and some are not.  It depends on your individual state.  TurboTax is keeping in close contact with individual states to find out compliance.  If your state is not in compliance with the federal tax law then you would have to file your state tax return as single.  TurboTax will guide you through the process.

What if I’m married and living in a state where same-sex marriage is recognized? How will I file?

How you will file is determined by whether the state where you were married recognizes same-sex marriage.  If the state where you were married recognizes same-sex marriage then you would file as a married couple.

What if I have a domestic partnership? Can I file as a couple on my federal taxes?

The federal ruling does not apply to registered domestic partnerships so you could not file as a married couple in that situation.

If someone is using TurboTax, will it guide them through these kinds of questions?

Yes, TurboTax does guide you through these questions.  When preparing your tax return, TurboTax will ask you simple questions about you and your marital status so that your federal and state tax returns are filed correctly in compliance with the new ruling.  You can also use the TurboTax DOMA decision tool to help you figure out if you have more money coming to you if you amend previous year's tax returns.

I understand that as a part of the Supreme Court ruling couples have the opportunity to go back and amend their last three years tax returns, if they have money coming to them.  How will couples be able to find out if it is worth it to do that or not?

Yes, that's correct.  Legally married same-sex couples have the choice to go back and amend their last three years taxes if they have money coming to them.  TurboTax has an online decision tool to help quickly and easily determine if you will benefit from filing as a married couple for tax years 2010 – 2012.  If you want to amend your tax return yourself, Turbotax will give you tax software for 2010, 2011 and 2012 for free.  Our you can have a credentialed tax expert complete your amendments for you for a fee.

TurboTax is pretty easy to use because it asks you questions and leads you through the process of filling out our tax forms. Will there be specific questions about same-sex marriage in the program, to help guide same-sex couples through the tax filing process?

Yes, TurboTax ask simple questions about you and based on your answers takes you down the correct path and guides you so you can accurately file your taxes.

If a couple is legally married, can they still file their taxes separately if they want to? How will they know if it’s better to file single or married?

No, under the new ruling same-sex couples generally must file their 2013 federal income tax return as married filing jointly or married filing separately.

If a couple just got married this year, because, for example, marriage only became legal in Washington State this year. Can they go back and amend my taxes for the past three years? Or do they have to have been legally married for those three years?

You would have to be legally married in those years.   

Explain TurboTax’s service that will have certified tax professional amend a couple’s federal return.

If you decide not to file your amendments yourself for free, you can have a credentialed tax expert prepare your amendments for you for a fee of $99 per amended tax return.

Is there anything else we should know about filing our 2013 taxes this year?

Don’t forget the following:

  • When filing your 2013 taxes as a couple you are now entitled to valuable tax deductions and credits for dependents on your tax return so don't forget your receipts for things like summer camp, daycare, or college courses you pay for your dependents.  These may lead to bigger tax savings when you file together.  As a couple you may also be entitled to valuable tax credits like Earned Income Tax Credit, which may be worth up to $6,044 for 2013.

 

  • You may see a possible reduction in your tax liability since tax rates are typically lower for couples filing jointly.  A married couple who earns $80,000 per year may see savings of at least $500 when filing jointly without considering additional deductions and credits they may be entitled to.  

 

  • If you had an employer provided health plan for your partner and the value of that coverage was included in your gross income, you can amend your previous tax return to recover federal taxes paid on the value of that coverage that would have been excluded from income if the employee's spouse would have been recognized as the employee's legal spouse for tax purposes.  This also applies to income taxes paid on premiums by you for your spouse on an after-tax basis.

 

  • You potentially will be able to save time and money on your tax prep costs.  People who once paid high fees to have someone prepare multiple federal and state tax returns can now easily and accurately file their taxes together with TurboTax at a significantly lower cost.

If you have more questions, you can get answers from our answer exchange talk to our credentialed tax experts via phone.

 

Visit the TurboTax blog for more information.

 

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