Discussion:Do any married same-sex couples pay less tax?

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Discussion Forum Index --> Basic Tax Questions --> Do any married same-sex couples pay less tax?


Discussion Forum Index --> Tax Questions --> Do any married same-sex couples pay less tax?

Kareneemery (talk|edits) said:

10 April 2014
This year, I have prepared my first returns for married same-sex couples, just a couple of them. They both pay significantly more tax married than they did when they had to file as single taxpayers. If my state (NC) ever legalizes same-sex marriage, they'll pay even more than they did this year. So I was curious -- does anyone have clients who pay less married than they did single?

Ckenefick (talk|edits) said:

10 April 2014
Yes, it's called the "marriage bonus."

STG (talk|edits) said:

10 April 2014
At higher incomes they tend to do better. Lower incomes, especially with kids involved - not so much.

STG (talk|edits) said:

10 April 2014
When one has income below their $10000 "half" of the standard deduction and exemption they can come out better as well.

Kareneemery (talk|edits) said:

10 April 2014
I've never had a reason to see the difference between filing as single or as married. It's interesting to be able to quantify exactly how much more it costs these married couples. (Maybe "interesting" isn't the right word for their reaction, though.)

Ckenefick (talk|edits) said:

10 April 2014
Yeah, I had one couple that held off on the marriage owing to the bad results that would ensue here in the near term, based on the numbers we ran.

Death&Taxes (talk|edits) said:

10 April 2014
I simply tell them that one of them lost their 15, and perhaps 25% tax bracket, and let them decide which one it was.

Jake (talk|edits) said:

11 April 2014
The tax savings for joint filers is largely when one has a high income and the other a low or perhaps no income. Ohio may be the only state with a progressive tax structure that has no separate married filing joint rate schedule. But if you file jointly for federal you have to file jointly for Ohio. However, for same sex marriages Ohio makes them file separately because Ohio does not recognize same sex marriages, though Ohio has to allow them to file a joint federal return. They have the best of both worlds. I wish us opposite sex couples had the same privilege. In my case we would save about $450 on Ohio taxes but separate federal filing would add significantly more to our federal tax bill. On separate returns we would each get a $50 senior citizen tax credit and a $200 pension credit. On a joint return we only get that same $50 and $200. The progressive tax rate adds another $200. There is a joint filing tax credit but it is minimal for higher wage earners. Does anyone on here live in a state with a progressive tax rate schedule that does not have a lower rate schedule for joint filings (like the federal)?

Jake (talk|edits) said:

11 April 2014
One of the hidden birds in married filing separately is that 85% of soc sec is taxable no matter what your income is.

There is also an issue with the child care credit and IRA eligibility. The best deal is unmarrieds with a child. One gets HH rate.

Taxaway (talk|edits) said:

11 April 2014
married same-sex couples pay exactly the same as married opposite-sex couples.

(have to provide the extra qualifier: on a federal return which recognizes the marriage recognized in the state where the original marriage took place.)

Gazoo (talk|edits) said:

11 April 2014
Philosophically, I have never been able to see marriage as anything other than a penalty. I have been chained to the same woman for 44 years and I feel more scourged that John Paul II felt himself scourged, and he finds himself on the verge of sainthood for tanning his hide with a big belt.

Joanmcq (talk|edits) said:

12 April 2014
I've had them all over the gamut. I've amended a whole bunch of returns where the couple did better filing joint, had a bunch more where it didn't make much difference except we amended to get rid of the imputed income paid on spousal health insurance, and some where especially since splitting community income was in place, were much better off filing as two singles. I've a few couples where one was a stay at home and the other a very high wage earner and just the AMT savings were significant.

PDXTaxman (talk|edits) said:

12 April 2014
We have told our gay couple clients that there are many reasons one might choose to get married, but taxes are not always among them. Sometimes MFJ is better than two individuals filing Single, but it seems more frequently the other way around. The biggest problem we have is explaining to them that filing MFS is NOT the same as two unmarried people filing Single.

EZTAX (talk|edits) said:

12 April 2014
Jake - "One of the hidden birds in married filing separately is that 85% of soc sec is taxable no matter what your income is. " This is true only if they lived together during the year. There is a check box in your software to indicate this. (another lesson learned the hard way!)

PDXTaxman (talk|edits) said:

12 April 2014
EZTAX, thanks. I didn't know that myself. Good info!

Ckenefick (talk|edits) said:

12 April 2014
http://www.taxalmanac.org/index.php/Discussion:Taxable_Soc_Sec_%26_MFS

Here's that other thread. And I think there might still be some misconceptions about it. Go into your software, input SS benefits, click the MFS box, click "living together" and let us know what you find under a few different scenarios...try one with no other income.

CathysTaxes (talk|edits) said:

12 April 2014
Jake, an even better deal is unmarried with two children. One gets HH, child, and EIC, the other gets child and EIC. Yet married filing separately not only lose EIC, but they lose child tax credit.

Jake (talk|edits) said:

13 April 2014
I thought that this EIC gets more complicated if they live together. A long time ago I decided EIC returns were more bother than they were worth - don't do any except for a retarded person (politically incorrect I know) and I do his as an unpaid preparer.

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