It has been a nice few weeks of getting all misty-eyed at the adorable photos of all the same-sex weddings going on around town. Awwww! But as I learned the hard way, getting hitched means you're looking a whole new ball of wax, tax-wise. The Bucks Blog at the Times has an interesting post today about all of the financial shit you newlyweds will need to be thinking about. Well, interesting might be a strong word for a blog about tax code, but still. At least 75% of love is boring details.
Because things are still completely not fair, paying taxes as a same-sex married couple is still way more complicated than opposite-sex married couples. I was surprised to learn last year that even though New York State was "recognizing" marriages performed elsewhere, that recognition did not extend to jointly filing state taxes. My friend who schlepped all the way to D.C. to file paperwork only to find out he and his husband still had to do two separate state returns was pretty pissed. But worry not, friend, because now you can jointly file state taxes. The bad news is, you now have to do two federal returns each:
Married couples must now file their state income tax returns using a married filing status, even though they must continue to file as either singles or heads of households on their federal returns.
As a result, same-sex couples are likely to spend more time — and money, if they hire an accountant. That is because they are going to need to fill out their federal return twice: They must file their official return as individuals, but they must also complete a dummy federal return as if they were married so that they can compute their New York taxes.
I am your average stupid person when it comes to taxes, so I thought that everyone got a break when they got married, but apparently some people actually owe more if they file jointly? And it's not just rich people, it has to with how disparate your incomes are? I don't know.
But they should run the numbers before they do. Married couples who earn more than $75,000 each and plan on filing a joint return may want to continue to keep their “single” withholding so that they don’t end up owing the state money in April because of the marriage penalty, said Tina Salandra, a New York accountant with expertise in same-sex couples’ issues. The penalty causes married couples to owe more money than if they filed their returns separately.
There is a loophole that may allow couples to avoid being pushed into the higher bracket, however. Same-sex spouses can file their state tax returns using “married filing separately” status, which uses the same tax rates as if they were single, Ms. Salandra said.
Gay marrieds newly and oldywed alike should probably just go and read the article. Lots of things are better, some things are worse, everything is more of a pain in the ass than it is for straight people.