While there are currently thirty seven states which officially recognize same sex marriage, including the nation’s capitol, there are still thirteen states that don’t legally accommodate gay and lesbian couples, even if those same couples were legally married in another jurisdiction. Florida residents can now apply for and receive a marriage license, but these same sex couples don’t have all the same tax responsibilities because the Sunshine State doesn’t have an income tax.
Today, straight couples can meet the federal and state tax filing deadline by simply copying numbers from one form to another. This very simple task isn’t a reality and presents a problem for same sex couples because legally, they are regarded as single adults, who earn incomes, in the states which do not recognize such marriages.
Problems Same Sex Couples Face with Taxes
Available exemptions, credits, and deductions aren’t readily there for the taking for same sex couples. What’s more, these couples must untangle their combined expenses and file their taxes as single, not married. Though the Internal Revenue Service did change its rules to allow same sex couples to file jointly, there are still thirteen states that don’t have such provisions. In addition the IRS will accept joint returns even if the couple filing lives in a state that does not recognize same sex marriage.
“A necessary burden for most Americans, Tax Day is an accounting nightmare for thousands of gay and lesbian couples as they wrestle with the uneven legal status of same-sex marriage in the United States. They live in a country that recognizes their marriages, but some reside in the 13 states that do not, an issue that will be argued before the Supreme Court later this month.” —Yahoo Finance
However, those states are at the heart of the problem and though on April 28th, the United States Supreme Court will hear arguments on the issue, that’s still well away from the state tax deadlines. What’s more, there are five states that don’t recognize same sex marriage that require couples to file what’s known as “dummy returns.” These are multiple federal forms to help couples calculate their income and expenses in order to complete their state tax returns. Each spouse must fill out individual federal forms and then use those numbers to complete their individual state tax return.
The problem is most burdensome for same sex couples with joint bank accounts. For instance, if one spouse writes a check to a charity out of a joint account, it becomes problematic in taking advantage of the deduction. Another scenario might involve children and credits and deductions applicable to child care and other expenses. Though the couple might share these expenses equally, when it comes to filing an individual state return, things become quite difficult.
Currently, there are three states which provide forms, types of worksheets, which same sex couples can use in order to unwrap their joint finances. The difficulty with these forms is their verbiage, which isn’t easy to understand and the equations supplied to separate finances are quite hard to calculate.
Because of the ambiguity and confusion, many procrastinators, who just happen to be gay, might face the prospect of filing for an extension. Of course, this isn’t necessarily an easy task and can be a real burden to complete and receive. In addition, this problematic situation presents a financial cost that otherwise wouldn’t be necessary, which comes in the form of having to hire a tax professional, like a CPA.