For many years, gay and lesbian couples have had to sort through confusion and additional costs when filing their taxes. This is the year that taxes become more uniform for same-sex couples, regardless of the state in which they live.
A short history lesson: Since 2013, when the Supreme Court struck down the Defense of Marriage Act, married same-sex couples have been able to file a joint federal tax return. Yet if they lived in a state that did not allow same-sex marriage, (Alabama, Arkansas, Georgia, Kansas, Kentucky, Louisiana, Michigan, Missouri, Mississippi, Nebraska, North Dakota, Ohio and Tennessee), they could not file a joint state return. Confused? Many were.
The dueling tax returns added complexity and cost to the couples' tax situations. The Supreme Court ruling in Obergefell v. Hodges in 2015 legalized same-sex marriage nationwide. That means gay and lesbian couples no longer have to lead a double tax life.
Here are 2 Questions for Same Sex Couples:
- How should we file? Now the challenge for same-sex couples will be the standard question of which filing status is best for them: married filing jointly or married filing separately. A tax calculator can give you a glimpse of the filing status that may offer the lowest tax liability.
- Should we amend? Couples who live in one of the 13 states that did not recognize their union until the 2015 Supreme Court ruling can also consider filing an amended 2014 state tax return. Again, it's all about doing the math. You'll want to weigh whether the change in filing status will be beneficial in terms of your tax bracket, tax credits and deductions.
Resolving the same-sex marriage issue may have made life easier for single-sex couples, but the tax code still remains complicated for everyone. Couples with questions should talk with their advisor for their best, tax-related, happily-ever-after.