Supreme Court Decision on DOMA Case Will Lead to Big Tax Changes for Same Sex Couples.
Today’s decision by the US Supreme Court means that same sex couples that are legally married under state and or foreign law will be treated the same as any other married couple for tax purposes.
While this may be a win for gay and lesbian equality, it will bring both good and bad news to the tax front for these same-sex couples.
The good news is that married same-sex couples can now file joint tax returns and will also be entitled to the same estate unlimited asset transfer between partners that other married couples are entitled to upon the death of a spouse. For Same-sex couples where one partner earns much more that the other partner or where on partner has all the income this should result in substantial tax savings. It will also eliminate estate taxes that might have been due upon the death of the first married partner.
The bad news is that same-sex married couples will no longer be able to file as single with one partner taking the standard deduction and the other itemizing to maximize tax savings. Married same-sex couple like all other married couples will have to file married filing joint or married filing separately. For same sex couples with income for each that is equal or close to equal this will mean a higher tax bill.
If you are a same-sex couple that is married under state or foreign law, you should plan to review your income tax and estate tax situations with a tax professional. Since the decision has just been released it may take time for all the ramifications to come to light and we will keep you updated as new information develops and all the effects become clear.
6/26/2013 11:36 AM By: Steven J Weil, PhD, EA, LCAM